Displaying items by tag: costs

China: China Resources Cement has issued a profit warning for the nine-month period ending on 30 September 2022. The producer said that it expects its profit to 'significantly' decline year-on-year on account of lower sales volumes and an increased cost of sales during the period, compared to the corresponding period in 2021.

Pakistan: Fecto Cement recorded sales of US$30.4m during the 2022 financial year, up by 37% year-on-year from US$22.3m during the 2021 financial year. Throughout the year, the producer's cement volumes fell by 1.9% to 713,000t from 729,000t, while its exports fell by 51% to 26,600t from 54,700t. Its cost of sales increased by 32% year-on-year to US$26.5m from US$20.1m, but this failed to offset sales growth, resulting in a US$1.29m profit for the company, compared to a US$309,000 loss in the 2021 financial year.

Pakistan: Thatta Cement recorded net sales of US$19.1m during its 2022 financial year, up by 75% year-on-year from US$10.9m in its 2021 financial year. This included gross export sales of just US$3160, down by 99% from US$394,000 in the 2021 financial year. Thatta Cement's total cost of sales increased by 96% to US$18.1m from US$9.24m. Its raw material costs tripled to US$1.64m from US$546,000, while its fuel and power costs more than doubled to US$12.5m from US$5.89m. As a result, the producer recorded a profit for the year of US$387,000, down by 68% year-on-year from US$1.19m.

Chair Khawaja Muhammad Salman Younis said "The company showed better performance during the year, despite the tough market conditions, coupled with significant challenges and uncertainties due to political instability and the Russian-Ukraine war. Due to these factors, Pakistan’s economy remained under pressure throughout the year. Other economic factors such as the rise in energy prices in local and international markets, significant currency depreciation and a sudden hike in interest rates severely affected the industry's, as well as the company’s, performance." Noting the 'changing and challenging economic environment,' Younis said that Thatta Cement 'remained successful in achieving budgetary targets in terms of volumes and retention price.' He added "Our sales and marketing team put extra efforts into identifying the needs of our valued customers and explored new markets for the company, despite severe competition in the cement industry."

South Africa: PPC says that the consumption of cement in South Africa will ‘remain subdued’ without new ‘significant’ infrastructure investments. The producer forecast demand growth of 2.5% year-on-year in 2022. It concluded that growth will likely not suffice to offset its cost inflation.

The company said “PPC will continue its efforts to counter input price inflation through price adjustments, operational efficiencies and improved industrial performance.”

India: JK Cement’s consolidated sales were US$272m in the first quarter of its 2023 financial year, up by 33% year-on-year from US$205m. The company sold 3.56Mt of cement, up by 18% from 3.02Mt in the first quarter of the 2022 financial year. Its costs per tonne rose to US$62.32/t from US$51.32/t. This restricted the group’s earnings before interest, taxation, depreciation and amortisation (EBITDA) growth to 0.1% year-on-year, at US$50.3m, compared to US$50.2m one year previously.

JK Cement forecast 10% year-on-year cement volumes growth in the 2023 financial year as a whole. It said that it expects to accelerate its rate of sales growth from September 2022. Its focus throughout the financial year will be on capturing new markets and increasing its blended cement share.

China: West China Cement’s preliminary results indicate a profit drop of 40 – 45% year-on-year in the first half of 2022 to US$85.6 – 93.4m from US$156m. The group said that its finance costs rose by US$10.8m, while its foreign exchange gains were just US$4.05m in the half, compared to US$51.2m in the first half of 2021.

Australia: James Hardie recorded sales of US$1bn in the first quarter of its 2023 financial year, up by 19% year-on-year from US$843m in the first quarter of its 2022 financial year. Its net profit was US$163m, up by 34% from US$121m. The group increased its North America fibre cement board sales by 28% to US$740m, its Asia Pacific fibre cement board sales by 9% to US$140m and its Europe building products sales by 7% to US$112. James Hardie launched its new European subsidiary James Hardie Fiber Cement Europe during the quarter.

James Hardie lowered its full-year adjusted net profit forecast to US$730 – 780m from US$740 – 820m. Interim chief executive officer Harold Wiens said "The current calendar year has seen the macro-economic environment change around us quite significantly, with unprecedented levels of inflation, global supply chain disruptions and a war in Europe. The current macro-economic environment is not only creating uncertainty for the housing markets in all three regions we do business in, but it is also putting pressure on our fiscal year 2023 financial results due to increased input and freight costs. That said, we are confident we will be able to deliver growth above market and strong returns in fiscal year 2023, and that is reflected in our updated guidance we provided today, which at its midpoint represents 22% growth in adjusted net income versus the prior year."

India: Indian cement producers imported four shipments with a total of 160,000t of petcoke from Venezuela during the first quarter of the 2023 financial year. Reuters News has reported that a fifth shipment of 50,000t of petcoke is due to arrive in Mangaluru, Karnataka, in mid-August. A further, 30,000t, delivery is also scheduled for shipment from Venezuela during the month. Shipping takes around 50 days.

Ramco Cements enjoyed a US$15 – 20/t discount on its two 50,000t shipments of Venezuelan petcoke in June and July 2022, for which it paid US$10.7m and US$11.1m respectively. Its chief financial officer Sivaraman Vaithiyanathan said
"The quality of petcoke is very good and it has very low sulphur."

India: 30% of plants in India’s 78GW captive power plant network have temporarily closed due to high coal prices. 40GW-worth of capacity (55%) is coal-fired, with an annual consumption of 200Mt/yr. The Business Standard newspaper has reported that total Indian coal imports fell by 10% to 23.8Mt in July 2021 from 26.3Mt in June 2021. Deliveries of coal to non-power sector consumers fell by 33% year-on-year at the beginning of August 2021. The Indian Cement Manufacturers Association (CMA) and nine other national industry associations have contacted the government to urge the formation of policies for the equitable distribution of available coal.

India Cements has imported two shipments of Russian coal for use in cement production. The company’s power and fuel costs rose by 54% year-on-year in the first quarter of its 2023 financial year, which began on 1 April 2022. Its vice-chair and managing director Narayanaswami Srinivasan said “Most of our plants have coal-based captive power generation. The cost of captive generation is now more than the grid cost. Hence, we shut down all captive power units and resorted to grid power.”

Philippines: Eagle Cement’s sales rose by 24% year-on-year to US$246m in the first half of its 2023 financial year from US$199m a year earlier. Its income was US$53.4m, down by 20% year-on-year from US$66.6m. Eagle Cement attributed the decline to cost impacts resulting from the Russian invasion of Ukraine and bottlenecks in global supply chains. Its operating expenses were US$26.1m, up by 35% year-on-year.