9M16 results see upturn in the US and Egypt

9M16 results see upturn in the US and Egypt
04 November 2016

Several cement companies released their 9M16 results this week. While the US and Egypt provided a healthy boost to business results for companies such as Titan Cement Group, in Asia and the Middle East returns were less positive.

Titan Cement Group released its 9M16 results this week and relied on its Egyptian and US operations to boost its turnover, which climbed to EUR1124m, up 9.2 per cent on the same period in 2015. Several cement producers have seen good margin improvement in Egypt on the back of the gradual conversion of the plants to solid fuels, but the currency devaluation has limited this upside.

Titan has also benefitted from its Florida facilities in the US and is positive about the US construction sector going forward with the prospect of lucrative contracts form the USD305bn FAST Act for transport developments, while residential markets are expected to improve further as mortgage rates are low.

While Titan found cement demand healthy in its Turkish markets with activity strong in both private and public works, other Turkish producers reported mixed results.

LafargeHolcim's 3Q results revealed similar trends with North America and Europe showing positive momentum, but contrasted by challenging trading environments in key markets such as Brazil and Nigeria.

Downward trends were also apparent in the market of Indonesia, where PT Indocement saw a 12 per cent drop in 9M16 sales. Semen Baturaja suffered worse with net profit slipping by 34 per cent, which was attributed to a rise in the cost of goods. PT Holcim Indonesia reported a top line growth in sales revenue of 5.3 per cent over 9M16, but competition resulting from domestic oversupply undermined profitability.

Resurrecting the fortunes of UAE’s cement sector is proving to be a long-term challenge. Ras Al Khaimah Cement was the first to release 9M16 results in the region and recorded a disappointing 85 per cent fall in profits YoY.

Forthcoming results
Next week will see the figures from HeidelbergCement Group’s 9M16 on 9 November, the company's first set of financial results since consolidating the Italcementi acquisition on 1 July 2016. Exane BNP Paribas has estimated that the group is likely to see its EBITDA improve by around four per cent YoY, again helped by US operations.

Meanwhile, Cimpor releases its 3Q16 results on 16 November 2016 and CRH announces its next set of results on 17 November 2016.

Published under Cement News