Votorantim has provided details of its 1Q14 results, which show an 11% increase in net revenues y/y, reaching R$6.6 billion. The increase is attributed to strong prices and volumes in cement in Brazil in addition to good performances in the long steel and metals sectors.
In Brazil, revenues increased in the quarter. Higher operating margin, coupled with reduced administrative expenses, improved EBITDA. Sales volumes in North America were impacted by the harsh winter weather, while efficiency improvements in Europe, Asia and Africa had a positive effect on revenues and EBITDA. Consolidated EBITDA increased by 41% y/y to R$1.5 billion, of which 53% came from the cement industry.
Selling expenses were driven up by higher sales volumes and increased freight expenses, while administrative expenses were down 6% thanks to the reduction of third-party services in cement and reduced staff in long steel. In 1Q14, Votorantim posted net income of R$8 million, compared with R$199 million in 1Q13. The steep decline relates to expenses with the redemption of the 2019 and 2020 bonds, amounting to R$400 million. Taking this out of the equation, net income would have been 105% higher than 1Q13.
Investments in fixed assets in 1Q14 totalled R$465 million, a decrease of 18% y/y. Of the total, 20% went to expansion projects and 80% to maintenance, modernisation, safety, health and the environment. Expansion Capex remained focused on the development of cement production capacity, which accounted for 79% of the total.
The cement market in Brazil continues to present solid growth. According to the National Cement Industry Union (SNIC), cement sales in Brazil in the first quarter of 2014 came to 17.1 million t, a 6.4% increase over the same period in 2013.
Net revenues in cement totalled R$2.8 billion in 1Q14, 10% up on 1Q13, mainly explained by higher prices and sales volume in Brazil, along with the exchange rate effect on the consolidation of VCNA and VCEAA. EBITDA amounted to R$764 million, up 16%, mainly driven by higher operating margin and the exchange rate effect on the consolidation.
Adapted from press release by Katherine Guenioui
Read the article online at: https://www.worldcement.com/the-americas/21052014/votorantim_cement_segment_contributes_r$2-8_billion_in_1q14_231/