Votorantim Cimentos’ regional results in the 2Q22 recorded strong revenues despite inflationary pressures. The domestic market of Brazil and operations in Europe, Asia and Africa were the highest performing areas with a decline in Latin American revenues.
In Brazil net revenue was BRL3.2bn (US$620.2m) in the second quarter of 2022, a 24 per cent increase compared to the same period last year. Adjusted EBITDA in the quarter was BRL606m, down nine per cent from 2Q21 due to a drop in sales and cost pressure caused by high commodity prices and local inflation, which were substantially mitigated by local price dynamics. According to national cement association SNIC, cost inflation has strongly impacted the sector. One example is the price of petcoke has increased 73.5 per cent in the last 12 months, said SNIC. In addition, the price of electricity, freight, bagging materials, gypsum and refractories continues to significantly increase, according to the association.
In North America, net revenue was BRL2.1bn in 2Q22, an increase of eight per cent compared to the same quarter last year, as a result of strong demand in Canada and the US, combined with favourable price dynamics. Adjusted EBITDA in the region was BRL520m in the second quarter, down 11 per cent from the 2Q21. This decrease was due to the impact of inflation on variable costs, mainly fuel and energy, in addition to the appreciation of the Brazilian real in the quarter, said Votorantim.
In the region that includes Europe, Asia and Africa, Votorantim Cimentos’ net revenue increased 13 per cent in the second quarter, totalling BRL841m. This positive result was primarily due to price dynamics in all countries where the company operates and sales growth in Spain, both organic and brought by the additional volume resulting from the acquisition of Cementos Balboa. Adjusted EBITDA in the region was BRl167m in the quarter, down nine per cent from the 2Q21, primarily as a result of the exchange rate impact when compared to last year. There was a 10 per cent growth in EBITDA in 2Q22 compared to the same period last year. Pricing dynamics and favourable market conditions in the region have mitigated pressure on costs, especially of fuel and energy.
In Latin America, net revenue in the second quarter of the year was BRL205m, down 17 per cent from the 2Q21. This result was impacted mainly due to Uruguay's market dynamics after the entry of a new competitor in mid-2021 and the most favourable comparative base in 2021. Bolivia experienced positive price dynamics, with a stable cement volume demand. Adjusted EBITDA in the region was BRL41m in 2Q22, down 42 per cent compared to the 2Q21. In addition to the market conditions in Uruguay, the pressure of cost inflation in both countries and the appreciation of the real also had a negative impact on the results.
