Votorantim Cimentos recorded global net revenue of BRL5.2bn (US$961.2m) in the 3Q20, a 37 per cent increase compared to 3Q19. The growth was due to the positive impact of a 15 per cent increase in sales, resulting from a recovery in demand in all regions. In addition to positive market dynamics and the appreciation of the dollar against the real.
Consolidated adjusted EBITDA in the quarter was BRL1.5bn, an increase of 94 per cent in comparison with the 3Q19, with an EBITDA margin of 30 per cent. The company's leverage, as measured by the net debt/adjusted EBITDA ratio, was 2.85x, in line with the company's financial policy.
"We recorded solid operating results in the third quarter, and we have remained attentive to the impacts of the coronavirus pandemic and market dynamics. We maintained our financial discipline through the management of liabilities and the control of our costs and investments, ensuring a cash liquidity position that will enable us to face the still uncertain environment in the coming months," said Osvaldo Ayres Filho, global CFO of Votorantim Cimentos.
Regional performance
In Brazil social isolation led people to allocate resources to home improvement and renovation projects, leading to a growth in the building materials market. Federal emergency aid and the historic drop in interest rates contributed to positive market dynamics. In addition, the real estate and civil construction sectors, which were considered essential services during the pandemic, continued their activities. Votorantim Cimentos recorded net revenue of BRL2.5bn in the country, a 30 per cent growth compared to the 3Q19. Adjusted EBITDA was BRL611m, an increase of 259 per cent compared to 3Q19, with strong market performance by building materials and adjacent products, such as mortars, aggregates and lime.
In the USA and Canada, the cement market experienced stable and less challenging dynamics than initially anticipated for the 3Q20, driven by the economic reopening after the initial impact of COVID-19 restrictions. In North America, net revenue was BRL1.8bn in the 3Q20, an increase of 42 per cent in comparison with the previous year. Adjusted EBITDA was BRL671m, an increase of 35 per cent in comparison with the 3Q19.
The Europe, Asia and Africa region saw the beginning of a gradual recovery in demand. Net revenue grew 41 per cent in 3Q20, compared to 3Q19, reaching BRL634m. This growth was mainly due to the depreciation of the real and the contingency plan in progress, in addition to the improvement of market conditions in Turkey and price dynamics in Spain and Tunisia. Adjusted EBITDA in the region was BRL188m, an increase of 94 per cent.
In Latin America and other regions, net revenue grew by 67 per cent, to BRL248m. The effects of positive operating results in Uruguay, where the COVID-19 pandemic was successfully controlled, were partially offset by the challenging situation in Bolivia. Adjusted EBITDA grew by 151 per cent, to BRL67m.
