CM-CIC Securities are expecting Vicat to report net profits of EUR100m (vs. EUR94.6m in 1H10) on 4 August 2011. EBITDA should reach EUR267m, ie an increase of 9.1% for an improvement in revenues of 13.8% to EUR1121m.
The EBITDA margin is likely to see a contraction of 100bp in the comparison base due to the difficulties encountered in putting through price increases in France, North America and Egypt whereas cash charges have suffered due to the impact of an increase in the cost of certain factors, particularly electricity and, on emerging markets, labour costs. In Egypt in particular (11% of revenues and 23% of EBITDA), the end market contracted by 9.3% in 1Q and stabilised in 2Q11 although June’s figures took a dip.
Moreover, the market felt the impact of production stoppages that coincided with the recent political turmoil which was compounded by pressure on prices that contracted by EGP60 from the peak reached at end-2010, ie EGP520 (between 2011 and 2013, CM-CIC estimates that 12Mt of additional capacity should come on-stream, partly controlled by the opaque ASEC and the armed forces, at El- Arish, not far from Sinai Cement-Vicat’s area of influence).
Overall, thanks to the group’s exposure to two mature markets that are still very profitable (France and Switzerland, ie 53% of EBITDA, where end construction markets are still healthy), CM-CIC Securities believe that the risk of an unwelcome surprise is under control.