- Global net revenue totaled R$5.8 billion, an 18% increase compared to 1Q22.
- Adjusted EBITDA was R$779 million, an increase of 85% over the same period last year, with a positive impact on the EBITDA margin.
- Leverage, measured by the net debt/adjusted EBITDA ratio, was 1.78x, slightly lower than in the first quarter of 2022;
- The company inaugurated the Ventos do Piauí wind farm, in the Northeast of Brazil, in partnership with Auren;
- On May 10, 2023, Votorantim Cimentos obtained a category A registration as a publicly-held company before the Brazilian Securities and Exchange Commission (CVM).
Votorantim Cimentos ended the first quarter of 2023 with a net profit of R$78 million, reversing the R$317 million loss in 1Q22. The company’s global net revenue in 1Q23 totaled R$5.8 billion, an increase of 18% compared to the same period in 2022. This was the result of the sales volume added by the new plant in Málaga, in the south of Spain, and favorable price dynamics in all regions, which mitigated the negative effect of the appreciation of the real on the consolidated results from international operations. In the first quarter, the company’s global cement sales totaled 8 million tonnes, remaining at the same level as in 1Q22.
“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.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) totaled R$779 million in the first quarter of 2023, 85% higher than in 1Q22. The positive consolidated operating results were driven by price dynamics in all regions, which also positively impacted the EBITDA margin in the quarter. The EBITDA margin in 1Q23 was 13%, an increase of 4 percentage points compared to 1Q22. At the end of the quarter, leverage (measured by the net debt/adjusted EBITDA ratio) was 1.78x, an increase of 0.23x compared to the end of 2022 and 0.06x lower than in 1Q22. This metric remains in line with the company’s financial policy and investment grade indicators.
“We reached the end of 1Q23 with a solid cash position of R$3.6 billion, of which 40% is in strong currencies, mitigating the risks of a potential depreciation of the real. This cash amount is above our minimum cash policy and will enable the company to meet its financial obligations for the next four years,” said Bianca Nasser, global CFO of Votorantim Cimentos.
At the beginning of this year, 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 55 MW to the company’s installed power generation capacity in Brazil. At the end of March, Votorantim Cimentos published its 2022 Integrated Report, highlighting information on progress regarding the ESG agenda and the targets related to its 2030 Commitments. The report is available at votorantimcimentos.com.br/relatorio-integrado.
Votorantim Cimentos informs that, on May 10th, obtained a category A registration as a publicly-held company before the Brazilian Securities and Exchange Commission (CVM), which represents another step in the evolution of the company’s corporate governance. Issuers registered in category A are authorized to issue/trade any type of security on regulated Brazilian markets. This category A registration as a publicly-held company before CVM will enable Votorantim Cimentos to expand immediately its access to the fixed income market in Brazil, in line with its strategy of diversifying its funding sources and investor base.
Performance by Region
In Brazil, Votorantim Cimentos’ net revenue in the first quarter of 2023 was R$3 billion, a 13% growth compared to 1Q22. The favorable price dynamics offset the drop in volume in the cement market resulting from a prolonged period of heavy rains in all regions of the country, in addition to the challenging economic environment, according to the National Cement Association (SNIC). Adjusted EBITDA was R$547 million, 51% higher than in 1Q22, as a result of the 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 material.
In North America, net revenue totaled R$1.2 billion in the first quarter, an increase of 20% compared to 1Q22, resulting from positive demand mainly in the United States, in addition to price management both in the United States and Canada. Adjusted EBITDA in the region in 1Q23 was negative R$47 million compared to negative R$122 million 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.
In Europe, Asia and Africa, net revenue increased 43% in 1Q23 compared to 1Q22, totaling R$1 billion. Adjusted EBITDA in the region grew 93% in 1Q23 compared to 1Q22, to R$264 million. 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 (Spanish association of cement producers), cement consumption in the first quarter increased by 6.7% 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 R$194 million in the first quarter of 2023, an increase of 3% compared to 1Q22, as a result of better prices in Uruguay and the low comparison base of 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 R$28 million, down 18%. 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.
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