Cimpor’s first half turnover improved by 5.7% to €1,149.58m and the EBITDA increased by the same percentage to €315.6m with Brazil, Turkey and China are proving to be the company’s top performers.
As depreciation and impairment charges only increased by 1.6%, the trading profit (EBIT) rose by 8.2% to €198.6m. A further 38.7% reduction in financial charges led to a 16.5% advance in the pre-tax profit to €181.8m. A reduction in the tax charge from 34.0% to 23.9% meant that the net attributable profit advanced by 34.0% to €132.2m. The net debt at the end of June was 6.9% lower at €1600.5m, leading to a further reduction in the gearing from 79.5% a year earlier to 77.6% this time. Capital expenditure in the period increased by 10.4% to €86.4m, with Brazil accounting the largest share of the expenditure, followed by Mozambique. Expenditure on other investments was 46.3% higher at €16.4m.
Consolidated cement deliveries were 0.7% lower at 13.82Mt, with higher production levels in China, Turkey, Brazil and South Africa offsetting significant reductions in Portugal, Egypt and Spain.
The Portuguese turnover declined by 10.7% to €199.9m and the EBITDA was off by 12.0% to €59.5m. Cement and clinker sales fell by 21.4% to 1.92Mt, with clinker sales to Egypt disappearing but cement sales to Brazil grew. Some gains were realised from selling emission permits, but the domestic cement market contracted by some 9% and the outlook has deteriorated with the cancellation of major infrastructure projects. The reduction in Spanish cement deliveries was 15.0% to 1.25Mt and was made worse by declining exports, though prices did improve by about 3% and additional profits came from selling emission permits.
Brazil is the largest cement producer in the group by some margin, accounting for one-fifth of the group volume in the first half. In that period, the Brazilian turnover advanced by 24.5% to €341.6m 4m, and the EBITDA improved by 19.5% to €106.8m. Cement volumes from the eight works rose by 9.9% to 2.77Mt, and production capacity is being increased to take advantage of the growth potential of the market.
Egyptian cement shipments dropped by 19.5% to 1.67Mt and prices suffered from reduced demand and increased capacity. Turnover fell by 28.8% to €91.3m and the EBITDA dropped by 33.3% to €31.0m. The reduction in margins, however, was limited to 2.3 percentage points to 34%, suggesting a further downside risk unless demand begins to recover. In Morocco, on the other hand, cement deliveries improved by 1.8% to 0.62Mt and concrete deliveries rose by 11.1%, with the turnover increasing by 3.5% to €51.6m though the EBITDA declined by 11.4% to €19.2m because of higher energy costs. Tunisian turnover improved by 6.7% to €44.2m and the EBITDA was 1.9% higher at €12.5m. Cement volumes, however, eased by 1.7% to 0.93Mt. Turkey performed strongly with turnover rising by 24.3% to €81.6m and the EBITDA jumping by 65.7% to €13.4m. Cement and clinker volume rose by 12.2% to 1.45Mt and ready-mixed concrete deliveries shot up by 38.7%.
In China, cement deliveries rose by 16.6% to 1.92Mt and prices staged a good recovery, leading to a 71.9% increase in turnover to €63.5m and at the EBITDA went from a €2.7m loss to a profit of €14.1m, in spite of higher energy costs. In India, increased competition gave rise to a 1.7% volume decline to 0.50Mt though the turnover did increase by 4.9% to €28.8m, but the EBITDA came off by 9.7% to €4.3m and competitive pressures increased because of additional capacity having come on-stream.
South African volumes were boosted increased exports, but domestic deliveries were also ahead and the tonnage rose by 9.2% to 0.61Mt. Turnover improved by 3.5% to €73.3m but the EBITDA came off by 5.9% to €27.8m. The Mozambique cement volume was just 0.6% higher at 0.42Mt, while turnover improved by 9.3% to €47.5m, but the EBITDA fell by 23.0% to €5.1m as product had to be imported during the upgrading the Matola works. Cape Verde Islands volumes eased by 4.3% to 0.12Mt, but the turnover improved by 7.6% to €17.5m and the EBITDA advanced by 20.5% to €2.5m.