Cementir sees slow, gradual recovery

Cementir sees slow, gradual recovery
Published: 27 July 2010

Italian cement producer Cementir Holding expects a slow and gradual recovery in its performance based on the second-quarter results, presented on Monday.

In the second quarter of the year, revenues rose by 4.4% over the same period of 2009. This
represents a significant reversal of the decline seen over seven straight quarters and marks an improvement in the conditions in all the Group’s major geographical markets, with the exception of Italy, where the problems faced by the construction industry persist.

EBITDA rose by EUR 4.5 million over the second quarter of 2009, with a ratio of EBITDA to
revenues of 16.8% (15.6% in the second quarter of 2009). This shows how, thanks to actions taken by management to adjust overhead costs to new expected revenue flows, the slight recovery in demand has had an immediate impact on profitability.

Work continues on studying the project to completely overhaul the Taranto factory, which would require an investment of around EUR 150m over 3 years.  With regard to the waste management business in Turkey, in July the first integrated waste management, recycling and disposal centre in the country was inaugurated in Kula, in the Aegean region.

The group is also considering a project to double its production capacity in Malaysia.

The company said the positive signs seen over the last few months, after almost two years of constant declines in revenues, may mark the start of a slow, gradual recovery. In seems that certain markets have already reached the bottom of the deep recession that began in 2008. The situation for Italy is, however, rather different; the sector is right now experiencing the very peak of the crisis, volumes and prices still decreasing, partly because the residential building market entered the recessionary period about six months behind the other European markets, and because this decline was not quickly offset by the start of significant public works projects.