Votorantim Cimentos has reported global revenue of BRL5.8bn (US$1.17bn) in the first quarter of 2023, up 18 per cent YoY. Adjusted EBITDA over the same period advanced by 85 per cent to BRL779m, with a positive impact on the EBITDA margin, which stood at 13 per cent in the 1Q23, marking an increase of four percentage points on the 1Q22. The company ended the 1Q23 with a net profit of BRL78m, reversing the BRL317m loss seen in the first quarter of 2022. Cement sales in the first three months of 2023 came in at 8Mt, on a par with the same period a year earlier. Much of the growth in revenue was due to the sales volume added by the company’s new plant in Málaga, Spain, along with favourable price dynamics in all regions.
“At the end of 2022, we completed the acquisition of the plant in Málaga, Spain, and the asset was completely integrated, having met the expected synergy gain curve in the first quarter. Price management implemented globally to face cost inflation also contributed to the positive results in the quarter, despite the still volatile and uncertain scenario in the global economy. The company remains firm and aligned with its strategic plan, with financial solidity and prepared for the opportunities and challenges that lie ahead,” said Osvaldo Ayres Filho, global CEO of Votorantim Cimentos.
At the beginning of 2023, in partnership with Auren (a company formed by the integration of the energy assets of Votorantim S.A. and CPP Investments), Votorantim Cimentos inaugurated the Ventos do Piauí wind farm, located in the Northeast of Brazil. The project is expected to add 55MW to the company’s installed power generation capacity in Brazil.
In Brazil Votorantim Cimentos’ net revenue in the first quarter of 2023 was BRL3bn, up 13 per cent YoY. Favourable price dynamics offset a drop in volume in the cement market resulting from a prolonged period of heavy rain in all regions of the country. Adjusted EBITDA was BRL547m, 51 per cent higher than in the 1Q22, supported by growth in adjacent businesses, in addition to price management, which mitigated the impacts of the drop in volume and pressure from variable costs, mainly fuel, freight and raw materials.
In North America net revenue came in at BRL1.2bn in the first quarter of 2023, an increase of 20 per cent compared to the 1Q22. This was mainly due to positive demand in the US market, in addition to price management both in the US and Canada. Adjusted EBITDA in 1Q23 was -BRL47m, compared to -BRL122m in the 1Q22. Despite the improvement, results in the first months of the year are traditionally impacted by winter in the northern hemisphere, a seasonal effect that was partially mitigated by positive market dynamics, according to the company.
In Europe, Asia and Africa, net revenue increased 43 per cent YoY in the 1Q23 to BRL1bn, while adjusted EBITDA grew by 93 per cent YoY to BRL264m. The positive result was due to price dynamics in all countries in the region, in addition to strong market dynamics in Spain and the full integration of the Málaga plant, an acquisition completed in November 2022. According to Oficemen, the Spanish association of cement producers, cement consumption in the first quarter increased by 6.7 per cent compared to the same period in 2022. These positive impacts were enough to mitigate the appreciation of the real against the euro in the period and a challenging market in Morocco.
In Latin America net revenue was BRL194m in the first quarter of 2023, an increase of three per cent compared to the 1Q22, driven by better prices in Uruguay and the low comparison base of the 1Q22. This was enough to mitigate the drop in sales volume in Bolivia due to production interruptions prompted by protests and heavy rains in the period. Adjusted EBITDA was BRL28m, down 18 per cent YoY. The results in the region were primarily impacted by market dynamics in Uruguay, despite the positive price management in the country, and production interruptions in the area where the company operates in Bolivia, the rainy season and holidays.
