Net revenue

Votorantim Cimentos posts net sales of 4.9 billion reais in the first quarter of 2022

Votorantim Cimentos closed the first quarter of 2022 with consolidated net sales of R$4.9 billion, an increase of 22% compared to the same period last year. This was mainly due to favorable pricing dynamics in Brazil, North America, Europe, Asia and Africa, as well as the positive effect of new sales volumes resulting from acquisitions made by the company in 2021. .

In the first quarter, the company’s global cement sales totaled 8 million t, a growth of 5% compared to 1Q21, despite the market contraction suffered during the period in some of the countries where it operates.

“War in Europe, sanctions on Russia, new lockdowns in China and bottlenecks in supply chains continue to impact the global economy. In addition, rising interest rates and cost inflation have affected companies and markets as a whole. In the face of this challenging environment, we remained aligned with our strategy and focused on cost, operational excellence and our business plan across all regions,” said Marcelo Castelli, Global CEO of Votorantim Cimentos.

Votorantim Cimentos ended the first quarter with a consolidated adjusted EBITDA (earnings before interest, tax, depreciation and amortization) of R$418 million, down 57% compared to the same period in 2021. This is explained by the solid basis for comparison with 1Q21, combined with climatic factors (rainy summer in Brazil and harsh winter in North America), the exchange rate and the effect of non-recurring items recorded in the same quarter of last year which totaled nearly 132 million reais (sale of land belonging to a subsidiary in Turkey and credit linked to the renegotiation of the hydrological risk of electricity production).

The pressure on raw materials, energy and fuel prices affected the quarterly EBITDA margin, which stood at 9%. Due to global macroeconomic challenges, the company ended the first quarter with a loss of R$317 million, compared to the profit of R$227 million recorded in 1Q21.

At the end of the first quarter of 2022, the leverage (measured by the net debt/adjusted EBITDA ratio) was 1.84x; although this represents a slight increase, as expected, compared to December 2021 (1.55x), it maintains the long-term downtrend, in line with the company’s financial policy.

“Despite a scenario of macroeconomic instability and cost pressure, the company remains financially strong, which is reflected in an investment grade rating by all three major credit risk rating agencies. We completed the first quarter with strong liquidity, which allows us to meet all debt maturities over the next five years. It should be mentioned that 40% of our cash is concentrated abroad,” said Bianca Nasser, Global CFO of Votorantim Cimentos.

Performance by Region – In Brazil, Votorantim Cimentos’ net sales in the first quarter of 2022 amounted to R$2.7 billion, an increase of 21% compared to 1Q21. Despite local market instability, macro-economic pressures and a solid basis of comparison with the same period last year, the increase in turnover is mainly due to the combination of a sales volume and a higher prices. Adjusted EBITDA for the quarter was R359 million, down 40% compared to March 2021 due to cost pressure caused by raw material prices, local inflation and the effect a non-recurring element in the first quarter of last year (credit linked to the renegotiation of the hydrological risk of the electricity production), which increased the EBITDA by R$58 million.

In North America, net sales amounted to R$1 billion in the first three months of 2022, an increase of 24% compared to 1Q21, due to additional volumes resulting from acquisitions made l year and strong market momentum in Canada and the United States. The region’s adjusted EBITDA was negative R$122 million in the first quarter, compared to positive R$10 million during the same period in 2021. This reversal is due to more difficult weather conditions in the Northern Hemisphere , which had a significant impact on operating results.

In the region covering Europe, Asia and Africa, Votorantim Cimentos net sales increased by 10% in the first quarter, reaching R$697 million, driven by increased volumes in almost all countries in the region and the addition of Cementos Balboa, in Spain. . The region’s adjusted EBITDA was R$133 million in the quarter, down 46% compared to 1Q21, when a non-recurring item (sale of land in Turkey) led to an increase in EBITDA of nearly R$74 million. Market momentum was unable to alleviate pressure on petroleum coke and energy costs, nor the impact of a truckers’ strike in Spain in mid-March.

In Latin America, net sales in 1Q22 were R$189 million, down 17% compared to the first quarter of 2021. Worse market dynamics in Uruguay dragged down the result, an effect that was partially compensated by the Bolivian market which, despite macroeconomic challenges, has been on a positive trend, with better volumes and prices, since last year. The region’s adjusted EBITDA was R$34 million in the first quarter, down 50% compared to the same period last year. Besides the situation in Uruguay, the devaluation of the real also had a negative effect on the results in the region.

Highlights of the quarter – In March, Votorantim Cimentos acquired, from Auren (formerly Votorantim Energia), 49% of the total shares of Ventos de Santo Ângelo Energias Renováveis ​​​​SA. The company holds a stake in three special purpose companies which hold authorizations to explore wind farms to produce electricity.

In the same month, the company introduced Motz, a new digital carrier solution that came to market to create a simpler, more agile model to transform the logistics journey for truck drivers and shippers. Motz combines the strength, reach and freight network of Votorantim Cimentos with the startup spirit of a leaner, more agile, innovative and high-tech logtech.

Thanks to a digital platform, Motz connects shippers with independent drivers. The new carrier focuses on dry cargo, related to the civil construction product chain, and can service multiple segments, including agribusiness, mining and steel, among others. Motz has previously operated in the freight transportation of Votorantim Cimentos and other companies.

Read the article online at: https://www.worldcement.com/the-americas/12052022/votorantim-cimentos-posts-net-revenue-of-r49-billion-in-q1-2022/