Egypt: Suez Cement 1H16 sales up 6%

Suez Cement Group of Companies (SCGC) 1H16 results showed that growth slowed in 2Q16, due to lower demand during the holy month of Ramadan and June. However, overall, the domestic cement industry grew 7.6 per cent in 1H16 versus 1H15.

Cement prices continued to improve, following 1Q16 trends to jump four per cent during April, May and June. That being said, prices were still three per cent lower between Jan-Jun 2016 compared to 1H15.

Group sales volumes increased six per cent across the country. SCGC’s efforts were bolstered by a 61 per cent increase in export sales in 1H16 versus the first six months of 2015.

Despite this, slumping sales in Ramadan and the beginning of the summer resulted in a 1.9 per cent fall in revenues for 2Q16, whereas half-year revenues rose 6.1 per cent YoY compared to 1Q15.

SCGC’s EBITDA declined 12 per cent in 2Q and HY16 mainly due to depressed cement prices and the adverse ripple effects of the Egyptian pound’s devaluation. SCGC was able to recoup some operational costs thanks to reduced energy, imported raw materials and spare part costs.

SCGC maintains an optimistic outlook on cement production and sales in 2016 and onwards as Egypt’s construction sector still embodies strong core fundamentals.

SCGC is currently preparing for the implementation of its coal energy conversion project at the Helwan plant over the next two years. SCGC’s energy diversification programme is focussed on increasing the use of waste-derived fuels, petcoke, coal and renewable energy to prevent fluctuating natural gas and heavy fuel oil prices from negatively impacting the company’s bottom line.