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The Wonderful World of Cement Replies |
rffrydr
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 Posted: Thu Feb 02, 2012 3:58 pm Post subject: |
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Looks like Cemex is gonna make it..... That should just about do it for the (developed world) industrial hits in this cycle. Now just start writing calls and generate your own dividend. 
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rffrydr
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| Posted: Mon Jan 16, 2012 7:30 pm Post subject: |
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Forget "p/e's" on this stuff....it's '08 again.
Holcim: soggy foundations
Two bullets bitten; more to come. On Monday, Holcim became one of the first big cement makers to take chunky asset writedowns because of flagging demand for construction materials in certain markets. It is unlikely to be the last. In the Swiss company’s case, the non-cash impairments, totalling SFr775m, come in two parts: SFr415m in respect of AfriSam, the South African construction materials company in which it holds a minority stake, and another SFr360m to cover writedowns in Spain, eastern Europe and the US.
The realism is welcome. A controlling stake in Holcim South Africa was sold to local investors five years ago, leaving Holcim with 15 per cent of the renamed AfriSam and deconsolidating it from the Swiss group. Since then, AfriSam has battled a heavy debt burden and weak construction market in spite of the World Cup fillip. Restructuring has been acrimonious and the latest charge writes off a 2009 notes issue for which Holcim subscribed. In Europe, meanwhile, Spanish cement consumption has fallen 65 per cent since 2008. In the US, it is down 45 per cent. No rebound looks likely any time soon and auditors across the sector need to focus on realistic asset valuations.
That said, Holcim’s writedowns are small for a business with total assets of more than SFr40bn, and forecast 2011 net income (pre-impairments) of about SFr1bn. Given a solid balance sheet, dividends are still possible. What should concern investors is margin trends. Holcim’s operating margin fell from 19 per cent in 2007 to 12 per cent in 2010 and had eased further in the first nine months of 2011. Cement prices may now have bottomed, but it is still unclear whether any increases in 2012 will outstrip cost inflation.
On a multiple of more than 15 times 2012 forecast earnings, its shares look expensive.
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rffrydr
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rffrydr
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| Posted: Wed Oct 12, 2011 7:30 am Post subject: |
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Nothing left to see here. Move along.
Cemex: falling cement slabs
| Quote: | Might it just make sense to try to catch a falling cement slab? Cemex, the world’s third-largest cement producer by revenues and a model emerging market multinational, is undergoing a savage chastening.
Its shares now trade more than 90 per cent below their 2007 high, at less than a quarter of book value, and less than a quarter of sales. Even for an emerging markets group exposed both to global construction, and to a devaluation in the Mexican peso, this pessimism seems excessive.
The problem is its debt. Cemex’s 2007 purchase of Australian building supplies group Rinker, for $24bn financed mostly with short-term debt, was horribly misjudged. By the end of its second quarter, the company was on course to breach its covenant with bankers to keep its total debt to within 7 times earnings before interest, tax, depreciation and amortisation, as this ratio had hit 7.16. But Cemex insists that cost cuts, and savings generated by lower fuel costs, will lift ebitda and bring it within the covenants by December. If a global recession pushes revenues down, it can go beyond planned non-core asset sales, and sell off its true crown jewels, for which there would be willing buyers. It faces no principal repayments until 2013. Its creditors, led by Spanish banks, have no reason to push it into default.
If Cemex debt is oversold, is there a case to buy the stock? Potential forced asset sales or a debt restructuring in the event of renewed recession leave plenty of downside even from here. But Cemex is really, really cheap. Its closest peer, France’s Lafarge, whose shares are down 75 per cent from their peak, trades for half its book value, a 125 per cent premium to Cemex. Existing creditors and investors are rightly angry that Lorenzo Zambrano, chief executive, misplayed his hand in good times. Those wanting an intriguing cheap bet on economic recovery might be grateful. |
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rffrydr
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| Posted: Mon Oct 03, 2011 1:31 pm Post subject: |
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One of many BK stories getting priced in today. Now let's see what a forced breakup of BAC will bring. 
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rffrydr
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rffrydr
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rffrydr
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rffrydr
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| Posted: Mon May 30, 2011 7:44 pm Post subject: |
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The rationalization of china's cement industry is yet another piece of the oil consumption puzzle:
http://video.cnbc.com/gallery/?video=1959399439
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rffrydr
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| Posted: Fri Apr 15, 2011 2:43 pm Post subject: |
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rffrydr
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| Posted: Fri Mar 11, 2011 11:41 am Post subject: |
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Hulbert on market reaction to earthquakes:
http://www.marketwatch.com/story/earthquakes-rarely-shake-the-stock-market-2011-03-11
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...They focused on all entries in the “Chronology of Important World Events” from the World Almanac for the period beginning with Pearl Harbor, and then eliminated from their list any events that the New York Times didn’t carry as a lead story and that the Times business section didn’t report as having affected investors.
The result was a list of 49 distinct events. On the day the news of those events hit the market, the S&P 500 moved just 1.46% on average, less than one percentage point more than the 0.56% that prevailed on all other days. Because of this small difference, the professors concluded that there’s a “surprisingly small effect” of noneconomic news on the stock market. |
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rffrydr
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| Posted: Wed Jan 19, 2011 10:07 pm Post subject: |
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rffrydr
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rffrydr
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rffrydr
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| Posted: Thu Dec 31, 2009 11:27 am Post subject: |
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Makers are seeing little and expect little more, in infrastructure spending. The move is East: new housing and infrastructure is to be supplanted by better housing and infrastructure.
| Quote: | While the appetite will revive once developed economies rebound, there are drawbacks of being too focused in the mature markets. Record levels of government debt in western economies are likely limit infrastructure spending while years of frenetic consolidation limit future mergers and acquisitions.
This makes it difficult for cement companies to grow in mature markets except through expanding their building products ranges.
Cemex of Mexico andHeidelbergCement of Germany, respectively the third and fourth largest in the sector by market capitalisation, have stayed more focused on the west than Holcim and Lafarge.
Holcim earlier this year experienced the downside of doing business in lucrative, but often less stable developing markets. It has begun an as yet unresolved $550m compensation claim against the Venezuelan government after its subsidiary there was nationalised. |
http://m.ft.com/cms/s/0/b63afb24-f4e2-11de-9cba-00144feab49a.html?SID=3c25ddb1f813147774e3fbe138bdfda0
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