Votorantim Cimentos posted net income of R$1.1 billion in the third quarter of 2021, an increase of 57% over the same period last year. The company had global net revenue of R$6.4 billion in the third quarter of the year, an increase of 24% compared to 3Q2020, primarily due to an increase in sales volume and favorable price dynamics.
The company's global cement sales totaled 10.4 million tons in the third quarter of this year, a 7% increase compared to the 9.7 million tons sold in 3Q2020.
"We increased our production capacity and remained focused on serving the markets where we operate. We have a challenging scenario ahead and are already feeling the effects of cost inflation. However, the company is prepared, with good operational and financial metrics, which give us confidence to continue with our long-term strategic plan," said the Global CEO of Votorantim Cimentos, Marcelo Castelli.
Votorantim Cimentos ended the third quarter of this year with adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of R$1.7 billion (an 8% growth compared to 3Q2020) and EBITDA margin of 26% (down 4 percentage points over 3Q2020), as a result of cost inflation. Leverage, measured by the net debt/adjusted EBITDA ratio, was 1.54x, down 0.42x compared to December 2020.
In October, Votorantim Cimentos, through its Spanish subsidiary Corporacion Noroeste, completed the full acquisition of Cementos Balboa, in Spain. Cementos Balboa has a modern integrated cement plant located in Alconera, in the province of Badajoz, in the Extremadura region (Southwestern Spain), with an installed production capacity of 1.6 million tons of cement per year.
The company joined the Business Ambition for 1.5°C campaign committed to advancing toward a low-carbon economy and aiming to keep global warming to a maximum of 1.5°C by 2050. In line with this goal, Votorantim Cimentos formalized its commitment to aligning its CO2 emission reduction targets with the Science-Based Targets Initiative (SBTi). The company also joined UN's Race to Zero campaign, which promotes and encourages more companies, governments, and financial and educational institutions to unite and work for a healthier, net zero carbon emissions planet.
Performance by region – In Brazil, Votorantim Cimentos' net revenue in the quarter was R$2.9 billion, an increase of 24% compared to 3Q2020. Adjusted EBITDA was R$672 million, an increase of 11% compared to the same quarter last year.
The Brazilian cement market ended the first nine months of 2021 with a total of 49.2 million tons of cement sold, an increase of 9.7% over the same period last year, according to data from the National Cement Association (SNIC). The strong growth experienced in the first half of 2021, primarily due to a low comparison base in the same period last year, now follows a deceleration curve, as anticipated by the cement industry.
In North America, the company's net revenue was R$ 2.3 billion in the third quarter of 2021, an increase of 25% compared to 3Q2020. Adjusted EBITDA grew 11% compared to the third quarter of 2020, reaching R$747 million in 3Q2021 against R$671 million in the same period of 2020.
In Europe, Africa and Asia, Votorantim Cimentos' net revenue increased 25% compared to 3Q2020, reaching R$ 1 billion. The positive results are due to higher demand in Morocco, Turkey and Spain compared to the same period last year. Adjusted EBITDA was R$154 million in 3Q2021, a 20% reduction compared to the third quarter of 2020. The results in the region were also affected by energy costs and scheduled maintenance.
In Latin America, the company's net revenue in the third quarter was R$ 254 million, an increase of 2% compared to 2Q2020. The positive results were primarily driven by a recovery in the Bolivian market, which had been impacted by COVID-19 restrictions last year, and a strong demand for adjacent products in Uruguay. Adjusted EBITDA was R$85 million, up 19% compared to 3Q2020.
