Cimpor: strong growth in Egypt contrasts with Iberian decline

Cimpor:  strong growth in Egypt contrasts with Iberian decline
Published: 04 March 2010

Cimpor’s turnover was virtually unchanged last year at €2,085.5m, with a marginal decrease of 0.2% as the increased scope of consolidation and the strength of the Egyptian cement demand offset the weaknesses in the Spanish, Portuguese and Turkish markets.  Improved overall margins led to the EBITDA increasing by 3.3% to €605.9m.  Although the trading profit declined by 15.7% to €376.9m, a 53.1% reduction in the net financial charge led to a 21.5% increase in the pre-tax profit to €313.8m.  A return to as more normal tax left the net attributable profit 8.0% higher at €237.0m.  The net debt at the end of December declined by 8.8% and the gearing level came down from 109.2% to 88.3%. 

The consolidated cement and clinker volume increased by 2.2% to 27.40m tonnes as reductions in Portuguese deliveries were more than compensated for by the growth in Egypt and in Asia.  The group cement production capacity was raised from 31.0m tonnes to 33,5m tonnes during the year, with new capacity coming on stream in Turkey and in China. Aggregates shipments were down by 13.8% to 13.89m tonnes and ready-mixed concrete deliveries fell by 15.2% to 7.26m m³ and sales of dry mortar were off by 3.5% at 0.54m tonnes.  The turnover from trading and shipping fell by 37.4% to €71.1m, but and its profit contribution was a more modest 14.5% lower at €6.4m.   

The Portuguese turnover fell by 17.9% to €448.8m as both domestic and export sales declined and the EBITDA came down by 13.0% to €147.6m.   Cement and clinker sales by the Portuguese plants dropped by 24.6% to 4.25m tonnes.  The cement demand in Portugal fell by an estimated 16% and the sharpest volume reduction occurred in Spain, which had in recent years been an important export market for the group’s Portuguese cement works.  Sales of aggregates in Portugal declined by 13.1% to 6.43m tonnes, but in ready-mixed concrete there was a much sharper fall of 22.0% to 2.25m m³.  In Spain, the effect of the sharp fall in construction activity was mitigated by the initial consolidation of the acquisition of Cemex’ operations in on the Canary Islands.  Thanks to this, the volume reductions were limited to just 1.3% to 3.15m tonnes, while the aggregates volume declined by 6.3% to 4.23m tonnes and ready-mixed concrete deliveries by 8.1% to 2.19m m³.  The turnover from the enlarged Spanish operations were down by 8.4% to €328.8m and the EBITDA dropped by 43.8% to €46.6m. 

Cimpor improved in the Arabic-speaking parts of the Middle East, particularly in Egypt, which is now the group’s third largest cement market.  Turnover in Egypt rose by 49.2% to €240.6m and the EBITDA advanced by 42.7% to €104.5m as cement deliveries rose by 29.7% to 4.15m tonnes.  In Morocco, cement deliveries were 1.9% higher at 1.18m tonnes and the turnover improved by 6.0% to €94.2m and the EBITDA emerged 0.9% ahead at €41.8m.   The Tunisian EBITDA performed better, rising by 15.4% to €19.6m, with the turnover improving by 9.1% to €69.9%on the back of a 6.1% volume improvement to 1.61m tonnes.  Turkey, on the other hand, suffered from excess capacity in a fragmented market with the result that turnover dropped by 31.1% to €107.5m and the EBITDA was down by 29.2% to €11.1m.  Cement sales were comparatively stable with a decline of just 2.9% to 2.18m tonnes, but downstream volumes did suffer with aggregates shipments dropping by 47.3% to 1.21m tonnes and ready-mixed concrete deliveries by 36.0% to 0.87m m³.

The Brazilian turnover rose by 6.5% to €427.4m and the EBITDA advanced by 20.3% to €123.1m as Brazilian prices continued to improve, though cement shipments actually decreased by 2.6% to 4.53m tonnes but ready-mixed deliveries improved by the same percentage to 1.27m m³.  In spite of the lower output, Brazil took over from Portugal as the largest cement producer in the group.   While South African cement volumes declined by 12.7% to 1.43m tonnes, the aggregates tonnage improved by 12.3% to 0.83m tonnes.  The turnover did improve by 10.5% t0 €152.8m and the EBITDA advanced by 52.5% to €70.4m.  In Mozambique, the turnover improved by 4.6% to €80.9m, though the EBITDA declined by 12.5% to €11.9m, with the cement volume rising by 4.5% to 0.78m tonnes.  In the Cape Verde Islands, cement volumes declined by 21.9% to 0.22m tonnes after a sustained period of good advances, with the turnover falling by 25.6% and the EBITDA by 9.5% to €3.8m. 

The two Asian operations both showed volume and sales growth, with the Chinese volumes rising by 20.8% to 3.61m tonnes and the turnover improving by 23.5% to €81.1m, but the EBITDA fell by 24.1% to €4.7m.  In India, an additional three months’ contribution boosted the turnover by 63.9% to €52.9m and the EBITDA was more than trebled to €9.9m as the cement tonnage rose by 69.8% to 1.13m tonnes.