This week we are taking a look at the first-half results of the cement industry majors, which have all seen a strong overall performance during the course of the year to date.
Overall results
Record results were posted by several major cement companies during the 1H21. Holcim saw net sales climb 16.6 per cent like-for-like (LfL) to CHF12.556bn (US$13.82bn), while HeidelbergCement posted a 11 per cent advance in group revenue to EUR8.938bn (US$10.55bn). Elsewhere, Cemex recorded a 22 per cent YoY surge in net sales to US$7.266bn while Dangote’s group revenue was up 44.8 per cent to US$1.676bn.
The solid set of results reflects the turnaround of demand compared to the year-ago period, which was heavily impacted by the COVID-19 pandemic, assisted by an array of stimulus programmes that have been successful in kick-starting a recovery in the construction sector.
Regional trends
Despite bad weather affecting the first quarter, Holcim, Cemex and HeidelbergCement all posted a strong performance in cement volumes for the USA. Holcim and HeidelbergCement also saw a positive recovery in the Canadian market, as demand was boosted by the residential and commercial construction sectors.
Poor weather also affected volumes for the European cement industry in the 1Q21, but a surge in consumption for western Europe in the 2Q21 returned the sector to moderate growth overall to continue the region’s momentum. Cemex noted the accelerating residential and infrastructure activity to be a factor in its own European success for the first half.
Dangote saw volume growth in all of its countries of operation across Africa, apart from Senegal, which is already at full capacity. First half volumes in Nigeria and its pan-Africa region increased 33.2 per cent and 15.5 per cent, respectively, supported by infrastructure and housing programmes. Holcim also saw Nigeria as once of the key bright spots across its MEA region, while South Africa registered an important turnaround in results.
In terms of the wider Asia-Pacific region, Holcim and HeidelbergCement saw India affected by the latest wave of COVID-19 cases in the country during the second quarter, but volumes were still significantly up on the 1H20. The Philippines drove demand for Cemex, while Bangladesh was another strong market for Holcim and HeidelbergCement.
Outlook
Due to its unexpected nature, cement companies cannot account for further isolated waves of COVID-19 in their outlook for the rest of the year but have instead focussed on the strong overall fundamentals in the cement industry. Various stimulus programmes are expected to continue to have a positive impact on markets where they are deployed, helping boost construction activity and thus cement demand even further. However, the rising input costs from raw materials, energy and transportation have all been noted, as the impact of this on cement prices in affected countries remains to be seen.