Vicat’s strong performance in Turkey and India

Vicat’s strong performance in Turkey and India
Published: 05 August 2011

Vicat’s first half turnover rose by 16.4% to €1,146.2m, which represents a 10.7% increase on a comparative basis. EBITDA advanced by 9.2% to  €253.3, but the margin narrowed from 23.6% to 22.1%.

The trading profit improved by 11.0% to €164.8m, while the pre-tax profit was up by 4.4% to €142.8m, but the net attributable profit declined by 3.9% to €90.9m in the light of a 96.3% increase in the tax charge to 24.1% as more income was derived from higher rate countries such as France and India and a lower contribution from Egypt. 

Capital spending in period was 0.4% lower at €138.3m, with capital expenditure being 8.2% lower at €122.1m but spending on acquisitions almost trebled to €16.2m as the stake in the Kazakh cement subsidiary was raised to 84.1%. Net debt was increased by 12.4% to €1155.7m, giving a gearing of 48.5%. Cement deliveries rose 16.6% to 9.05Mt and the share of turnover from cement increased from 52.0% to 53.1%, with the cement turnover increasing by 15.7% to €699m.

In France, turnover improved by 17.8% to €489m and the EBITDA recovered by 22.0% to €106m. The cement turnover rose by 14.1% as volumes rose by almost 11% and export prices were notably improved, but domestic prices were marginally lower, though the product mix was more favourable. In the rest of Europe, turnover rose by 29.2% to €189m and the EBITDA improved by 14.7% to €47m, helped by the strength of the Swiss currency. Swiss cement volumes rose by 8.2% and downstream volumes also advanced.

The US turnover came off by a further 9.5% to €77m and the EBITDA loss increased by 41.8% to €6m, but the trading loss was just 2.5% worse at €21m. Turnover in cement declined by an underlying 13.1%, with volumes falling by 4.5%, with a greater decline in Alabama than in California, not helped by adverse weather conditions in the second quarter.

Turnover in Turkey improved by an underlying 9.0% to €94m. Cement volumes improved by some 4% and average prices did improve in what remains a very competitive market. In concrete and aggregates turnover declined by 5.3%, with volumes being down by more than 11% in aggregates and by over 12% in ready-mixed concrete, but a selective approach to pricing led to better yields.

Bharathi Cement Company in India generated a turnover of €61m in its first full period of consolidation on a volume of close to 1Mt. EBITDA showed a good increase, with margin rising from 14.7% to 24.2%, helped by the second production line coming on-stream. The joint venture Vicat Sagar Cement will start contributing next year. The new cement works in Kazakhstan commenced cement deliveries on 1 April and sold 0.13Mt in the period, generating a turnover of almost €7m.    

The African and Middle Eastern eased by 1.1% to €229m, though ahead by 3.8% in local currency and the EBITDA fell by 17.4% to €78m. In Egypt, the turnover fell by 13.9% in local currency, with volumes being off by 6.4% and the political situation also having a negative effect on prices. In West Africa, turnover rose by 19.2% as cement shipments rose by almost 21%. The average price, however, was lower, reflecting a strong increase in exports.