Italcementi’s volumes fall in Greece, Egypt Bulgaria and Spain

Italcementi’s volumes fall in Greece, Egypt Bulgaria and Spain
Published: 08 November 2011

Italcementi’s turnover for the first nine months edged ahead by an underlying 0.8% to EUR3,600.2m, but the running EBITDA came down by 15.2% to EUR564m. The trading profit fell by 25.3% to EUR236.2m and the net interest charge came down by 38.6% to €56.7m.  The reduction in the pre-tax profit was limited to 13.8% at EUR198.6m. Net profit was boosted by a EUR107.4m gain from the sale of discontinued activities and rose by 59.5% to EUR 212.8m, with the net attributable profit rising almost seven-fold to EUR123.20m, compared with just €18.5m a year earlier. Net debt at the end of September was 0.5% lower than a year earlier at EUR2218.6m to give a gearing of 44.8% compared with 48.2% a year ago.  Capital expenditure in the period was reduced by 27.3% to EUR 266.3m.

Cement and clinker deliveries were off by 1.6% to 38.9Mt, with the reduction largely caused by a 33.2% reduction in the volume of cement trading to 2Mt.

Cement and clinker sales in western Europe eased by 1.6% to 14.48Mt. Italian cement volumes were down by 4.9% to 6.8Mt, but prices have begun to recover. The 31.7% increase in turnover EUR 698.7m largely reflects the re-consolidation of Calcestruzzi, which also led to a more than doubling of the underlying EBITDA loss to EUR7.4m. In France and Belgium, turnover recovered by 5.3% to EUR1218.1m but EBITDA came down by 9.6% to EUR231.5m. French cement volumes improved by 5.9Mt, while in Belgium there was a 4.4% improvement, in spite of lower clinker exports. Group cement deliveries in Spain were down by 11.6%, but higher exports limited the overall volume decline to 4.6%. Greek cement shipments fell by 32.1%, with the third quarter drop being 43.8%.

The Arab countries and Black Sea regional turnover fell by 18.2% to EUR783.5m and the EBITDA declined by 18.0% to EUR253.1m. Cement shipments declined by 6.1% to 12.08Mt. In Egypt, by far the biggest market, turnover fell 30.3% to EUR425.7m and the EBITDA dropped by 42.5% to EUR108.1m, with domestic cement volumes being down 12.0% as a result of weak demand and increased production capacities. Moroccan cement and clinker shipments 8.2% in the first nine months, with domestic deliveries being ahead by 6.7% and prices improving in spite of the arrival of a new competitor. Profitability was additionally helped by reduced clinker purchases as the new Ait Baha works produced a greater volume and at a lower cost, with the EBITDA advancing by 16.8% to EUR115.5m on a turnover up by 6.4% to EUR265.0m. In Kuwait, cement deliveries rose by 6.7%, though competitive pressure increased in the third quarter.

Asian cement deliveries improved by 2.1% to 8.48Mt and turnover advanced by 16.8% to EUR385.4m, while the EBITDA recovered by 58.0% to EUR74.3m. Cement and clinker volumes rose by 5.3%, but the commissioning of additional capacities led to a 12.7% reduction in the third quarter. A new 3Mt cement works is being planned for North Karnataka to the northwest of where the company is not presently active. An investment of about US$400m is envisaged by Italcementi, which will own a 74% stake in the new works, scheduled for completion in 2015 and take the group’s Indian capacity to almost 9Mt. The Thai turnover increased by 15.1% to EUR151.3m and the EBITDA just over doubled to EUR22.7m. Total sales volume grew by 4%, with exports being curtailed because of the strength of domestic demand.  In Kazakhstan, additional modern capacity coming on-stream led to a 12.3% reduction in the volume sold. 

The North American turnover declined by 6.2% to EUR297.5m and the EBITDA tumbled by 82.7% to EUR2.4m as a result of fierce competition and higher transport costs. However, cement deliveries did improve by 4.3% to 3.15Mt and aggregates deliveries rose strongly by 32.6% to 0.98Mt, thanks to improved road-building activity in Canada.