Italcementi looks for improved overseas volumes in 2011

Italcementi looks for improved overseas volumes in 2011
Published: 08 March 2011

Italcementi’s turnover declined by 4.3% to €4790.9m in 2010, the underlying EBITDA fell by 13.9% to €836.3m and the trading profit dropped 20.1% to €353.8m.  Net financial charges were reduced by 3% to €95.6m.

Lower exceptional costs and an increased contribution from the Canadian associates left the pre tax profit 16.3% lower at  €259.2m, but the net attributable dropped by 35.8% to €45.8m as the large minorities’ charge rose by 5%, to €151.3m, or more than three times net attributable profit.  

Capital investment declined by 23% to €523.7m and spending on acquisitions dropped by 42.5% to €42.6m and consisted mainly of minority investments in Syria and China. Net debt at the end of 2010 was 7.8% lower at €2230.9m, giving a gearing of 44.7%, down from 51.6% a year earlier. The sale of emission rights produced an income of almost €56m, coming in the main from Italy, France and Bulgaria. Shipments of cement and clinker declined by 2.4% to 54.4Mt in the year.

Turnover in Italy declined by 16.4% to €824.8m and the EBITDA went from a positive €47.3m to a negative €36.3m and the trading loss more than doubled from €53m to €122.6m. Cement deliveries were off by 3.3%, but with a reduction less than that of the market, some market share was recovered. Prices also deteriorated, but both volumes and prices saw a more gentle decline in the final quarter than earlier in the year. Costs were reduced thanks to an increased use of alternative fuels and lower energy consumption at the rebuilt Matera works. The administration of Calcestruzzi has remained in the hands of the court, but a re-consolidation is in prospect for some time in 2011. 

French and Belgian turnover declined by 2.4% to €1493.8m and the EBITDA was down 4.7% to €318.2m. French domestic deliveries fell 4.3%, but overall cement and clinker sales were off by a more modest 3%. In Belgium, overall cement shipments improved by 1.5%, but domestic deliveries were down by 4.2%. Spanish domestic deliveries fell by 26.2%, but increased exports limited the overall volume reduction to 14.7%. Greek cementitious volume fell by 11.2%.  Bulgarian cement and clinker volumes dropped by 33.4% and prices suffered from falling demand and import pressures from Turkey.  

Egyptian turnover eased by 0.5% to €788.7m but the EBITDA improved by 3.2% to €270.7m. In endeavouring to maximise profits, domestic volumes were reduced by 5.4% in a market that grew by about 3%. In Morocco, turnover improved by 1.8% to €326.1m but the EBITDA narrowed by 4.9% to €125.7m. Domestic deliveries rose by 2.9% and prices were slightly higher, helped by the new Aït Baha works and a new grinding line at Indusaha. In Turkey, domestic deliveries rose by 8.8% and total shipments by 5.6%. For Turkey, a €4m EBITDA loss was still incurred, but with prices are now improving.  In Kuwait turnover rose by 2.4% to €50m and, group cement volume was up by 5%.

The turnover across the USA, Canada and Puerto Rico improved by 3.5% to €415.3m and the EBITDA just over doubled by rising 103.2% to €25.4m. Canada provided a healthy market. North American cement volumes were virtually stable overall, edging ahead by 0.2% to 4Mt, but prices suffered from severe competitive pressures in the USA and declined.   

Indian turnover eased by 1.2% to €169.8m while the EBITDA dropped by 40.6% to €36.0m, though domestic sales deliveries rose by 3.8% and total cement and clinker deliveries by 8.4% in an over-supplied market, but signs are now more positive. The Thai turnover recovered by 12.1% to €180.2m and but the EBITDA dropped by further 32.8% to €15m. Domestic cement sales improved by 3.1% and exports to Cambodia and Burma were higher, but clinker exports were well down, leading to the total cementitious volume being off by 2.1%. 

In China, turnover rose by 11.3% to €52.1m on a volume that was 9.4% higher, but new capacity led to lower prices and the EBITDA declined by 10% to €8.0m. The Kazakhstan turnover rose by 44.9% to €46.7m as volumes climbed by 16.1% and prices increased, more than doubling the EBITDA to €9m. The international trading activities sold 3.8Mt of cement and clinker last year, a reduction of 6.9%, with higher inter-group sales being higher by lower third-party volume. Turnover generated by the trading activities improved by 3.7% to €229.3m and the EBITDA rose by 30% to €14.3m.