Votorantim Cimentos ended the 2Q23 with BRL470m net profit, a 28 per cent increase compared to BRL366m (US$74.68m) in the same period last year. The company’s global net revenue in the quarter was BRL6.9bn, an increase of three per cent compared to the 2Q22, primarily due to the volume added by the Málaga plant in southern Spain acquired in November 2022. The company’s global cement sales in the 2Q23 totalled 9.5Mt, a slight decrease of one per cent compared to the 2Q22.
Performance by region
In Brazil Votorantim Cimentos’ net revenue in the 2Q23 was BRL3.2bn, similar to the 2Q22 despite a more challenging demand environment. Adjusted EBITDA, which was impacted by market dynamics in the cement business, totalled BRL567m. The growth in adjacent businesses partially mitigated the operating results.
In North America net revenue in the 2Q23 was BRL2.3bn, up 12 per cent compared to the 2Q22. This result was driven by price management in Canada and the USA, and solid demand in the USA during the quarter. Adjusted EBITDA in the region was BRL647m, a 25 per cent increase compared to the same period in 2022, which boosted margin growth.
In Europe, Asia and Africa, Votorantim Cimentos’ net revenue in the 2Q23 increased 16 per cent compared to the 2Q22, totalling BRL975m. This positive result was primarily driven by price dynamics in all countries where the company operates and by positive market dynamics in Spain, in addition to the complete integration of a new plant in Málaga acquired in November 2022. Adjusted EBITDA in the region was BRL312m, an 87 per cent increase compared to the 2Q22 mainly due to positive margin dynamics in all countries, especially Spain and Turkey, in addition to synergies leveraged through the acquisitions carried out in Spain.
In Latin America net revenue in the 2Q23 was BRL200m. The two per cent decrease compared to the 2Q22 resulted from market dynamics that led to a drop in volume in Uruguay and price reductions in Bolivia. Adjusted EBITDA in the region was BRL37m, down 11 per cent compared to the same period last year. In addition to macroeconomic variables and strong competition in Uruguay and Bolivia, the pressure of cost inflation and scheduled maintenance in the quarter had a negative impact on the results. On the other hand, the company has already been leveraging synergies brought by the concentration of its industrial activities in the city of Minas, Uruguay.
The company ended the 2Q23 with BRL1.6bn consolidated adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation), up 17 per cent compared to the 2Q22, thanks to better operating results, mainly in the North America region (VCNA) and the Europe, Africa and Asia region (VCEAA) and the positive impact of the new plant in Spain. The EBITDA margin was 23 per cent, an increase of three percentage points compared to the 2Q22. Leverage, measured by the net debt/adjusted EBITDA ratio, was 1.64x at the end of the 1H23, in line with investment grade indicators and the company’s financial policy. This result represents a reduction of 0.14x and 0.35x compared to the 1Q23 and the 2Q22, respectively.
“In 2023, we leveraged the synergies brought by the more than BRL5bn invested in mergers and acquisitions in the last two years, and increased our investments in competitiveness, adjacent businesses and decarbonisation. At the same time, we maintained our traditional financial discipline, which, combined with efficient margin management and high performance in countries with strong currencies, led us to our positive results in the first half of the year,” said Osvaldo Ayres Filho, global CEO of Votorantim Cimentos.
