Votorantim Cimentos 2Q20 cement sales edge up

Votorantim Cimentos released its results for the 2Q20, announcing that the company’s cement sales volumes reached 7.5Mt, up 0.3 per cent on the 7.4Mt sold in the 2Q19. Net revenues reached BRL3876 (US$717.21m), up 18 per cent on the 2Q19 when it totalled BRL3298m. EBITDA amounted to BRL735m up from BRL491m in the 2Q19.

Consolidated net revenues totalled BRL3.9bn in the 2Q20, an 18 per cent increase when compared to the same period of 2019, mainly explained by better volumes and prices in Votorantim Cimentos Brazil and the positive impact of the real depreciation in Votorantim Cimentos North America, which mitigated challenging scenario in Votorantim Cimentos Europe, Asia and Africa as well as Votorantim Cimentos Latam and others.

Brazil
Votorantim Cimentos Brazil's net revenues increased by nine per cent, from BRL1.6bn in the 2Q19 to BRL1.8bn in the 2Q20, mainly due to better cement volumes and prices in all local regions. Since May an increase in demand was reported throughout the country with a better market performance as social distancing has encouraged home improvements and an anticipation on maintenance expenditure during the lockdown in commercial streets and centres. The residential sector also maintained its positive trend since the end of 2019.

North America
In Votorantim Cimentos North America, net revenues reached BRL1.5bn, a 40 per cent increase YoY, mainly explained by the real devaluation compared to the same period of 2019 and stable demand during the quarter, a less challenging scenario than expected up to the 2Q20. The USA and Canada saw a positive dynamic during the 1H20 driven by favourable weather conditions and lower impact of COVID-19 restrictions in some of the regions where Votorantim Cimentos has presence. The milder winter provided stronger operational results with better sales volume and prices in certain markets during the semester.

Europe, Asia and Africa
In the Europe, Asia and Africa cluster (VCEAA), net revenues increased by two per cent in the 2Q20 when compared to the 2Q19, and reached BRL440m due to the decrease in sales volume in all countries mainly due to COVID-19 scenario partially mitigated by the BRL depreciation. In Votorantim Cimentos’ operation in Spain, the sales volume was impacted by the full lockdown in Spanish market from the end of March until the beginning of April, but operations have resumed since then and are gradually recovering.

Latam and others
Votorantim Cimentos Latam and other’s net revenues decreased by six per cent when compared to the 2Q19, from BRL$154m to BRL$145m, as result of lower volumes in Bolivia mainly due to full or dynamic lockdown since end of March 2020. This impact was partially softened by better volumes and prices in Uruguay.

Summary
Despite the pandemic, cement and construction sectors have continued to operate with limited restrictions in most countries in which Votorantim Cimentos operates. However, cement demand has been impacted in distinct ways and intensity in each region, and the outlook for all regions is very uncertain and challenging.