Vicat sees improved activity in May

France-based cement producer Vicat has provided an update of business levels in May, noting a marked improvement when compared with market performance in March and April.

In France business activity has been improving steadily since the low point of mid-March and by the end of May, the level was slightly lower than that recorded in the year-ago period. Switzerland also continues to perform well.

The challenging macroeconomic and competitive environment in Turkey and Egypt continue to affect Vicat’s activity levels.

Positive trends in volumes and prices have supported the company’s cement business in west Africa, but in Senegal the aggregates business continues to be impacted by the sharp contraction in government infrastructure projects.

While business levels have remained positive in the USA, both in terms of volumes and prices, the planned price hike in spring has been postponed to summer as a result of the COVID-19 pandemic.

The pandemic has only slightly affected markets in Brazil with volumes and prices continuing to be dynamic.

Following a strong start to the year, decisions on lockdown measures in Kazakhstan have lowered volumes and selling prices in April-May while strict lockdown measures in India between 24 March and 17 April saw activity interrupted in these months. However, activity has resumed but remains significantly below the year-ago level.

To adapt to the new business conditions, Vicat is implementing a cost-cutting programme that aims to reduce operating costs and defers non-strategic capital expenditure. This includes the relocation of the company’s registered offices to Isle d’Abeau, the operational centre of the group close to Lyon.

In terms of its balance sheet the group said that beyond its free cash flows, its financing requirements are currently covered by secured undrawn credit facilities that are available and sufficient to cope with forthcoming repayments falling due, and the terms and covenants of its financing agreements are respected.