Buzzi reduces cost base in Russian and Ukrainian ops

Buzzi reduces cost base in Russian and Ukrainian ops
Published: 12 November 2010

Buzzi Unicem’s turnover for the first nine months came down by 3.7% to EUR1999.5m and the EBITDA fell by 23.4% to EUR 326.4m.  The trading profit declined by 40.6% to EUR 154.8m and net financial charges were 7.2% lower at EUR 72.1m, giving a pre-tax profit 54.7% lower at EUR 87.7m and a net attributable profit decline of 49.2% to EUR 59.6m. Cement shipments were 1.3% higher overall at 20.0m tonnes, but volumes declined in the Czech Republic, the USA and in Mexico.

Italian turnover declined by 13.2% to EUR 469.2m and the underlying EBITDA fell by 32.7% to EUR40.9m, after including a EUR 29.5m credit from the sale of emission rights.  The results underline poor state of the Italian cement market and compares favourably with the EBITDA loss posted by the Italian market leader Italcementi.  Shipments of cementitious materials were helped by exports and clinker sales and improved by 4.8%.  Domestic cement prices dropped notably over the summer months and ended the period more than 20% down on a year ago.

German turnover recovered by 2.9% to EUR 412.9m and the underlying EBITDA improved by 6.0% from EUR 59.8 to EUR 63.4m. There was also a EUR 4.7m credit from the sale of emission rights.  Cement volumes improved by 0.9% to 3.66Mt, thanks to increased exports, while domestic deliveries were down by 1%.  The average price achieved was down by about 3%. Ready-mixed concrete deliveries rose by 20.1% to 2.33m m³, thanks to the initial consolidation of the Sibo Group, taken over from the Dyckerhoff associate Sievert.

Eastern European turnover improved by 1.9% to EUR 375.2m but the EBITDA came off by 14.6% to EUR 81.7m.  The Polish turnover was up by 6.3% to EUR 101m and the EBITDA was marginally higher at EUR 30m, with cement deliveries being 7.4% higher at 1.2Mt. In the Czech Republic and Slovakia, the cement price came off by 9.0% and volumes were 13.5% lower at 0.57Mt.  Ukrainian cement sales recovered by 8.5% to 1.15Mt and ready-mixed concrete volume by 15%, with turnover improving by 3.5% to EUR 61m but a further EBITDA loss was incurred, though the switch to coal firing has now been completed and this should allow a return to profit.  In Russia, the dry kiln at Suchoi Log was lit in August.  The plant’s cement shipments rose by 28.2% to 1.36Mt, but prices were down by 17.6%, with turnover being some 22% ahead at EUR 9477m but the EBITDA was 3% lower at EUR 35m.

In the United States, turnover declined by 8.5% to EUR452.1m and the EBITDA fell by 34.5% to EUR 69.3m.  Cement deliveries were down by 6.4% and prices weakened by 8.7%, but a more positive pricing trend had been emerging in recent months.