Italcementi first quarter 2011 improves

Italcementi first quarter 2011 improves
Published: 09 May 2011

Italcementi’s first quarter turnover improved by 9.7% to €1,153.2m, while the running EBITDA declined by 6.4% to €130.4m as the company reported advances in France, but declines in Egypt.

The trading profit recovered by 17.6% to €35.6m and, at the pre-tax level, there was a swing from a €5.7m loss into a profit of €23.4m after a net interest charge 58.9% lower at €16,1m and there was a net attributable profit of €127.6m compared wit a loss of €8.6m, helped by a €109.1m gain on disposals, chiefly in Turkey. There should be some further Turkish disposals this year. The net debt at the end of March was 2.9% lower at €2,166.4m to give a gearing level of 44.2%, down from 48.5% a year earlier. The sale of emission rights yielded €9m in the quarter, three times the amount booked that time last year.

Cement and clinker sales were 4.6% higher at 12.4m tonnes, though international trading activities saw volumes drop by 53.9% to 0.6m tonnes as reduced volumes were supplied to group companies in Egypt, and the EBITDA from cement and clinker trading declined by 5.9% to €2.8m.

Western European, cement and clinker volumes were 11.9% higher at 4.63Mt, with Italian shipments being 0.4m tonnes higher at 2.1Mt. The Italian cement and clinker volumes recovered by 9.6%, which was a better performance than the market and prices showed a recovery, but were still lower than a year earlier. A further price increase could be implemented during the summer. Turnover in Italy improved by 32.8% to €212.8m largely because of the inclusion of Calcestruzzi and because of Calcestruzzi’s losses a €19.4m loss was incurred at the EBITDA level. In France and Belgium, turnover rose by 20.5% to €392.8m and the EBITDA advanced by 26.5% to €53.8m, with cement volumes recovering by 19.1% in France and by 30.7% in Belgium.

Egyptian turnover declined by 21.6% to €167.6m as the political uncertainty halted the companies’ production for a week and disruptions in some places stopped construction activity for longer. The EBITDA was off by 17.7% to €50.9m, with cement deliveries declining by 13.8% and prices easing a bit. Ready-mixed concrete deliveries were down by 14%, but prices were higher than in the previous year. In Morocco, turnover was 5.1% higher at €84.9m and thanks to the new Aït Baha cement works, the EBITDA improved by 18.1% to €36.6m. The old Agadir works was closed at the end of March. Increased competition led to some reduction in prices, but domestic deliveries still increased by 3.9% and the overall cementitous volume rose by 5.5%.

Asian sales rebounded strongly after the weak start to last year, with turnover advancing by 37.1% to €130.3m and the EBITDA jumped by 72.5% to €24.8m, in spite of no positive contributions from China and Kazakhstan. India increased turnover by 53.3% to €69.5m and the EBITDA jumped by 95.1% to €15.5m. Cement and clinker sales rose by 24.5% in the first quarter and domestic cement sales were ahead by 15.2%, helped by additional capacity that came on-stream last year at the Yerraguntla works, with a grinding plant at Chennai being added shortly. In the Thai market, turnover was raised by 30.4% to €54.2m and the EBITDA advanced by 68.2% to €10.1m as domestic deliveries increased by 11.3%, while total cement and clinker sales were 9.1% higher. In the Shaanxi province in China, Italcementi increased cement and clinker volumes by 17.5%, but the results suffered because of the increased cost of coal. Kazakh volumes declined by 7.1% because of a bad winter, but better prices allowed a small profit improvement.

The North American turnover was up by 3.8% to €63.9m, but the EBITDA loss widened from €17.1m to €21.9m. Cement shipments improved by 6.8% to 0.6Mt, but average prices declined in a very competitive market that had to cope with higher input costs.