Arabian Cement Co (ACC) of Egypt reported a four per cent decline in revenues to EGP1711m (US$219m) for the first nine months of 2015, due to a 12 per cent decline in prices which was partially offset by a nine per cent increase in volumes.
Cost per tonne stood at EGP329/t less than the EGP352/t recorded in 9M14. The cost reduction is due to less imported clinker and enhanced energy efficiency. Meanwhile, cost per tonne for the 3Q15 was reduced by 12 per cent YoY to EGP308/t.
EBITDA stood at EGP536m in the nine months under review, 10 per cent less than the comparative period of the previous year. Net profit increased by 21 per cent YoY to EGP242m, with a profit margin of of 14 per cent.
Prices in 3Q15 were lower than the previous two quarters. Accordingly, the 9M15 average net price per tonne after deducting transportation cost, taxes and incentives stood at EGP536/t, 12 per cent lower than 9M14 of EGP610/t.
Increased utilisation and market share
Despite YoY market growth of just one per cent, ACC reported a nine per cent rise in sales volumes over the period to reach 3.2Mt compared with 2.9Mt in 9M14. The cement utilisation rate was 85 per cent compared to 78 per cent a year earlier. Accordingly, market share increased from 7.7 per cent to 8.3 per cent. This was mainly achieved through the production of ACC's own clinker. Some 138,000t of clinker was imported during 9M15 compared to 577,000t in 9M14.
The company's fuel mix now comprises the following sources of energy: coal/petcoke (77 per cent), diesel (15 per cent) and alternative fuels (eight per cent). Since the beginning of the year, ACC has managed to increase its alternative fuels usage from five to 11 per cent, while coal usage has stepped up from 68 to 78 per cent as at September 2015. The clinker utilisation rate has reached 85 per cent compared to 62 per cent in 9M14. Clinker production totalled 3.2Mt in the first nine months of this year, compared to 2.9Mt a year earlier.
Despite the muted demand growth seen in 9M15, ACC said it still believes "that the Egyptian market holds strong potential growth based on the underlying fundamentals." It forecasts sales of 1.1Mt during the final quarter. Prices have started to recover and it expects to see an average price higher than that of 3Q15, the company added. Clinker imports no longer need to be sourced externally. However, ACC still have a stock of 75,000t for usage during its two-week planned November stoppage.