Buzzi Unicem reports 3% uptick in cement sales in 1Q22

Buzzi Unicem reports 3% uptick in cement sales in 1Q22
13 May 2022

In the opening quarter of 2022, Buzzi Unicem saw its cement sales advance by 2.9 per cent YoY to 6.36Mt (1Q21: 6.19Mt). Ready-mixed concrete sales over the same period improved by six per cent to reach 2.69Mm3. Consolidated net sales over the opening quarter of the year came in at EUR800.1m, marking a 17.2 per cent YoY increase, which the company attributes to favourable trends in volumes across central and eastern Europe and the US. The Italian market, meanwhile, is slowing down, while Russia and Ukraine have seen their sales decline due to the conflict.  
Net sales advanced by 17.9 per cent to EUR163.3m with strong exports offsetting the contraction in domestic volumes. Hydraulic binders and clinker sales fell compared to the 1Q21 and while an improvement in selling prices was seen, this only partially compensated for the ongoing rise in production costs.  
Net sales in the US market improved by 15.5 per cent YoY to EUR301.9m with the strengthening of the dollar influencing the translation of results into euros. At constant exchange rates, revenue would have expanded by 7.6 per cent. While a shortage of truck drivers impacted the ready-mixed concrete sector, mainly in Texas, cement volumes increased in 1Q22, compared to the same period a year earlier, on the back of strong construction activity. Selling prices in the local currency also improved.  
Central Europe
Buzzi saw its net sales for Germany expand by 19.2 per cent YoY in the 1Q22 to EUR175.4m. High levels of construction activity and comparison with poor weather in the 1Q21 meant the 1Q22 volumes showed a markedly positive improvement. Selling prices also rose. Despite a slowdown in March this year, the quarter ended with higher sales volumes and prices.  
Bad weather in the 1Q21 also contributed to a better 1Q22 result in Luxembourg and The Netherlands, but this was also supported by solid demand, with selling prices increasing. The ready-mixed concrete sector reported both strong volume growth and pricing. Net sales for the region came in at EUR52m, marking an 18.8 per cent YoY uptick.  
Eastern Europe
Supported by a 5.4 per cent appreciation in the Czech koruna, net sales advanced by 33.4 per cent in the opening quarter of 2022 to EUR37.3m. At constant exchange rates, the improvement would have been 26.7 per cent. In the Czech Republic, both sales volumes and selling prices saw a marked improvement, while the ready-mixed sector, including Slovakia, reported a positive production trend and significant increase in prices.  
Sales volumes in Poland closed the first quarter of 2022 showing a significant increase on the same period a year earlier, which was, however, characterised by poor weather and slow demand. Selling prices also increased, leading to a 65.2 per cent uptick in net sales in the 1Q22 to EUR29.2m, despite a -1.7 per cent devaluation in the Polish zloty. At constant exchange rates, the increase would have been 68 per cent.  

Increased demand in construction investment resulted in higher cement and ready-mixed concrete sales in Ukraine in the first two months of the year. However, due to the war Buzzi Unicem suspended production at both of its plants, while sales prices increased, driven by inflation. Net sales over the 1Q22 contracted by 19.8 per cent YoY to EUR13.1m with the +4.2 per cent appreciation in the local currency favourably influencing the translation of revenue into euros. At constant exchange rates, net sales would have declined by 23.2 per cent.  
The company’s net sales in Russia came in at EUR38.2m in the 1Q22, up 1.4 per cent YoY. The significant depreciation of the ruble (-11.1 per cent) influenced the translation of results into euros. In local currency, they would have increased by 12.7 per cent. Sales volumes were buoyant in the first two months of the year but then slowed significantly in March, closing the 1Q22 at a lower level than 1Q21. Due to the sanctions imposed on Russia by the European institutions, Buzzi Unicem withdrew from any operational involvement in the activities carried out by the subsidiary OOO SLK Cement in Russia.  
Economic activity in Mexico, following the slowdown seen in the 2H21, began to improve in the first quarter of 2022. Moderate GDP growth is expected for this year, penalised by high inflation and a weak investment flow. Cement and ready-mix concrete volumes contracted although selling prices improved significantly. Net sales by Buzzi Unicem’s associate rose by 3.7 per cent YoY to EUR166.6m with the +6.3 per cent appreciation of the Mexican peso positively impacting the result. At constant exchange rates, net sales would have contracted by 2.8 per cent.  
Government initiatives have helped prop up the Brazilian construction sector with Buzzi Unicem’s joint venture seeing improved sales volumes following the additional contribution of the former CRH cement plants acquired in April 2021. Selling prices in the local currency improved significantly. On a like-for-like (LfL) basis, however, sales volumes would have contracted due to a particularly strong performance in the 1Q21. In the opening three months of this year, net sales (referring to 100 per cent of the associate), expanded by 89.9 per cent to EUR75.2m. The +11.1 per cent appreciation of the Brazilian real positively influenced the translation into euros. Like-for-like turnover would have contracted by 1.4 per cent.
Looking ahead to the rest of 2022 for the company as a whole, Buzzi Unicem is forecasting a possible decrease in recurring EBITDA of approximately 10 per cent, compared to the record results seen in 2021. This is primarily due to the conflict in Ukraine, persistent inflationary pressures and interruptions to energy supplies.  
2021 results
On 12 May 2022, Buzzi Unicem approved its financial statement for the year ended 31 December 2021. Consolidated net sales came in at EUR3445.6m in 2021, compared to EUR3222.4m in the previous year. EBITDA for 2021 stood at EUR794.6m, up on the EUR780.8m seen in 2020, while consolidated net profit was reported at EUR541.9m in 2021, versus EUR560.2m in the year-ago period.  

Published under Cement News