Cimpor advances in Brazil and Turkey

Cimpor advances in Brazil and Turkey
Published: 10 November 2010

Cimpor’s turnover for the first nine months improved by 6.7% to EUR1681.1m, boosted in particular by to a 45.0% advance in Brazil, and the EBITDA emerged 4.0% higher at EUR475.1m, with a EUR 55.6m increase coming from Brazil.  A 12.0% increase in depreciation charges and provisions led to a 0.3% reduction in the trading profit (EBIT) to EUR 298.7m.

Net debt at the end of September stood at EUR 1657.5m, giving a gearing level of 78.8%, down from 97.7% a year earlier.  Capital expenditure in the period was 43.9% lower at EUR 113.2m, while financial investments were more than doubled at EUR 19.5m.  Group cement and clinker shipments were 3.9% higher at 21.32Mt, with the biggest increases being seen in Brazil and Turkey.   The profit from trading and shipping doubled to EUR9.6m, thanks to the sale of a ship.  

The Portuguese turnover was off by 0.3% to EUR343.3m, and the EBITDA declined by 2.0% to €110.4m in spite of income from sale of emission rights.  Cement and clinker sales increased by 13.6% to 3.61Mt thanks to higher export volumes, which more than offset the decline in domestic deliveries.  In Spain, Cimpor did better than the market overall, thanks to a relatively better performance in Galicia and cement volumes declined by a mere 6.9% to 2.23Mt.

Brazil increased its lead as the group’s largest cement producer as volumes grew by 19.2% to 3.96Mt.  Additional capacity did help to boost volumes.  Turnover in Brazil jumped by 45.0% to EUR445.2m and the EBITDA by 63.2% to EUR143.4m, helped by favourable exchange rate movements, without which the advance in EBITDA would have been limited to some 34%. 

Egypt was the third biggest contributor in terms of both cement volume and EBITDA, though it lagged behind Spain in terms of turnover.  The Egyptian turnover edged ahead by 0.3% to EUR179.3m, but cement shipments declined by 5.8% to 2.86Mt and the EBITDA came off by 11.7% to EUR68.7m.
In South Africa, cement shipments dropped by 19.8% 0.89Mt, but a stronger rand and a 2.9% improvement in local currency prices reduced the reduction in turnover to just 3.5% at EUR111.7m, with the EBITDA falling by 13.4% to €46.1m as higher energy costs had to be absorbed.

In China, cement deliveries rose by 7.8% to 2.92Mt and the turnover moved up by 5.5% to EUR66.4m.  Pressures on prices have worsened with increased competition as the withdrawal of old capacity has been delayed and a EUR4.1m profit at the EBITDA level a year earlier was turned into a EUR2.4m loss this time, though a return to profit was seen in the third quarter.  Indian cement deliveries suffered from a weaker local market and shipments declined by 15.7% to 0.66Mt.  The turnover was off by 11.2% to EUR35.1m and the EBITDA dropped by 59.5% to EUR3.8m.