Buzzi Unicem has reported a favourable start to the year with first-quarter advances in volumes, turnover and EBITDA as milder winter weather boosts shipments.
Turnover recovered by 23.9% EUR569.40m and the EBITDA more than trebled to EUR42.70m. The loss at the trading level was reduced by 54.7% to EUR 18.23m. Net financial costs came down by 16.4% to EUR28.02m, leading to a 37.1% reduction in the seasonal pre-tax loss to EUR 46.73m. Net debt at the end of March was 2.2% higher at EUR1294.3m, giving a gearing level of 56.5%. Capital investment was 58.3% lower at EUR37.7m and included EUR15.3m spent on expansion projects in Russia, the Ukraine and Mexico.
Cement shipments were helped by a milder winter and rose by 27% to 5.6Mt. Kiln fuel costs rose in all markets, but electricity costs did decline in Germany, Poland, the Czech Republic and the USA, but rose in the Ukraine and in Russia.
In Italy, turnover declined by 3.3% to EUR131.7m while the EBITDA dropped from EUR6.5m to just EUR0.2m, with the proceeds from the sale of emission rights declining from EUR7.6m to EUR6.4m. Cement and clinker volumes improved by 6.3%, thanks to higher cement exports and clinker sales, but average selling prices were down by 12.3% in a fiercely competitive market, in spite of notably higher kiln fuel and electricity costs.
German cement volumes were boosted by the milder weather and cement deliveries jumped by 55.7% to 1.13Mt, though average selling prices were 3.3% lower. Proceeds from the sale of emission rights increased by EUR 0.6m to EUR3.1m and the turnover rose by 59.8% to EUR130.9 and the EBITDA result went from a EUR1.8m loss to a EUR13.9m profit.
In eastern Europe, turnover rose by 44.5% to EUR86.4m, but the EBITDA was EUR0.1m tower at EUR2.4m. In Poland, cement deliveries rose by 38.9% to 0.18Mt, in Czech Republic they doubled to 0.16Mt, in the Ukraine they rose by 88.6% to 0.23Mt and in Russia by 42.1% to 0.41Mt. Average selling prices declined in all countries, though in Poland the reduction was only a marginal 1.5% and higher than expected start-up costs had to be borne at the dry-process line at Suchoi-Log in Russia.
In the United States, first quarter cement shipments increased by 12.2%, but average prices declined by 7.9%. The higher cement volumes reflected more favourable weather rather than any improvement in underlying demand.
The Mexican associate Corporaciòn Moctezuma increased turnover by 29.1% to EUR 58.7m, helped by exchange rate movements as the peso appreciated by 6.7% against the euro, and the EBITDA improved by 31.9% to EUR 22.4m. In local currency, prices improved by 4.1%, and cement volumes rose by 17.5%, helped by the initial production from the new cement works at Apazapan in the state of Veracruz. The commissioning of the Apazapan works has gone smoothly.
In terms of the outlook for the remainder of the year, Buzzi Unicem maintains a cautious approach but noted that based on the first quarter figures, it does not see operating results for 2011 lower than those posted last year.