Buzzi Unicem expects a better second half

Buzzi Unicem expects a better second half
Published: 08 August 2011

Buzzi Unicem’s first half turnover improved 9.1% to €1339.4m, but the EBITDA still came down by 3.2% to €183.1m. For the full year, however, Buzzi Unicem is expecting the running EBITDA to show an improvement over last year on the back of a better second half.

First half trading profit was down by 14.5% to €62.5m and the interest charge was 7.8% lower at €46.0m, giving a pre-tax profit 38.6% lower at €16.1m. After a tax charge 54.9% lower at €4.3m and a minorities charge 3.5% higher at €12.2m, there was a net attributable loss of €0.3m compared with a profit of €5.1m. Net debt at the end of June was 0.2% higher at €1,265.3m, giving a gearing level of 47.3%. Capital expenditure was down by 52.6% to €79.2m, of which €25.7m related capacity increases. 

Group cement deliveries increased by 11.2% to 13.4Mt, but in spite of higher energy costs, the prices achieved were lower in all markets with the exception of the Ukraine and Mexico. 

Cement and clinker volume in Italy came off by 1.8% in the six months, but the average price achieved was down by 5% in spite of an improvement early in the year and a price increase in June. Buzzi Unicem’s Italian turnover declined by 5.8% to €290.2m and the EBITDA dropped by 83.2% to €6.9m, with the contribution from the sale of emission rights declining from €28.0m to €13.5m.

In Germany, Dyckerhoff’s turnover rose by 27.3% to €308.3m, helped by the inclusion of the SIBO group. Helped by a €7.9m contribution from the sale of emission rights, the EBITDA improved by 37.8% to €44.5m. 

The Polish turnover increased by 17.1% to €65.6m and the EBITDA by 18.3% to €15.0m. Cement volumes increased by 6.7% to 0.70m tonnes and prices were stable. The Czech and Slovak turnover rose by 26% to €80.3m and the EBITDA was 27.5% ahead at €15m. Cement volumes rose by 56.9% to 0.47Mt, including shipments to Poland, but prices weakened.   

Ukrainian turnover rose 30.9% to €42.4m and the EBITDA returned to positive numbers with a €1m profit, thanks to switching the kiln fuel from gas to coal.  Cement volumes rose by 24.9% to 0.76Mt and prices recovered by 9.5% in local currency.  Russian turnover rose by 35.0% to €75.1m, and the EBITDA improved by 11.3% to €20.5m.  Cement shipments increased by 43.8% to 1.09Mt, but local currency prices, though now improving, were 5.4% lower than in the corresponding period last year.

The United States operations of the Buzzi Unicem group saw marginal overall volume increases of 0.1% in cement, with distribution being disrupted by heavy rain and flooding in the second quarter.  Average selling prices declined by 6.7% in local currency and efforts at increasing prices from April only had a limited effect. Turnover declined by 2.8% to US$363.3m, which on translation converts into an 8.0% reduction to €258.9m.

The 50%-controlled Mexican associate Corporaciòn Moctezuma increased cement shipments by 13.9% and prices in local currency improved by 3.2%. A revaluation of the Mexican currency boosted the results on conversion and turnover improved by 16.4% to €118.3m and the EBITDA rose by a more modest 6.0% to €41.4m, reflecting higher costs.