Buzzi Unicem hit by lower Italian cement prices

Buzzi Unicem hit by lower Italian cement prices
Published: 11 August 2010

Buzzi Unicem’s first half turnover emerged 8.8% lower at €1,227.2m and the underlying EBITDA was down by 12.9% to €189.3m.  For the full year, Buzzi Unicem is expecting the running EBITDA to be off by around 15%.  The trading profit fell by 46.6% to €73.0m and, after a 16% reduction in the interest charge to €49.9m, the pre-tax profit dropped by 67.3% to €26.3m.

Group cement deliveries were 4.0% lower at 12.1Mt, though some recovery was seen in the Ukraine, Russia and Luxembourg and marginally so also in Germany.  The ready-mixed concrete volume decreased by 3.9% to 6.5Mm³.

The reduction in the Italian cement and clinker volume was limited to 4.0%, but excess supply in a poor market led to an 18.5% drop in the average price achieved.  In ready-mixed concrete volumes fell by 7.9% and prices by 3.7%.

In Germany, Dyckerhoff’s turnover was 2.0% lower at €242.2m, but the EBITDA improved by 28.2% to €32.3m, helped by a €4.7m gain on the sale of emission rights.  Cement shipments were 0.3% higher at 2.22Mt and ready-mixed concrete deliveries improved by 7.5% to 1.29Mm³, but prices came off by 2.4% in cement and by 6.0% in ready-mixed concrete.

In the United States, Buzzi Unicem’s first half cement deliveries fell by 10.8% and average dollar selling prices declined by 8.6%, in response to weak demand and plentiful supply.  Ready-mixed concrete deliveries were off by 0.5%.

Turnover declined by 14.1% to US$373.9m, which on translation converts into a 13.8% reduction to €281.4m.  At the EBITDA level there was a 41.9% reduction to €35.1m (US$46.6m) as the underlying margin dropped from 20.3% to 12.3% in response to falling prices and volumes.