Q3 Preview: Major Surprises Unlikely. Outlook Likely to be Key.

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Our Q3 / half year reporting season starts next Wednesday (28 October) for the nine companies that we publish forecasts for with Cemex as usual being the first to announce.

After Q2 results surprised positively, Q3 results are more likely to be in-line with Cemex and Heidelberg both having already reported their July and August volumes and results respectively. These trends appear to have continued in September, but the outlook is more uncertain with the COVID second wave strengthening and the economic outlook for 2021 deteriorating.

We expect Cemex, Heidleberg and Titan to report double-digit percentage like-for-like increases in their Q3 EBITDA. We expect Martin Marietta and Vulcan to report small declines, mainly due to the strong comparative a year ago. Buzzi and LafargeHolcim also have a strong comparative as in Q3-19 they benefited from a strong recovery in the Mississippi river market after last year’s flooding.

Fuel costs (coal and petcoke) have begun to increase in recent months, but with most companies buying fuel 4-6 months ahead of its usage we don’t expect this to have any impact in Q3 and probably only a small one in Q4.