Russia and the Ukraine depress Buzzi Unicem’s profits?

Russia and the Ukraine depress Buzzi Unicem’s profits?
Published: 13 November 2009

Buzzi Unicem’s turnover for the first nine months declined by 23.8% to €2,075.8m and the EBITDA fell by 41.7% to €426.3m.  The trading profit declined by 54.3% to €260.8m and lower interest receipts contributed to a 47.7% increase in net financial charges to €77.7m.  The pre-tax profit dropped by 63.6% to €193.3m and the net attributable profit by 60.3% to €117.3m.  Net debt at the end of September was 13.1% higher at €1,198.3m, after capital investment in the period of €268.3m.  61.0% of the investment went into four projects, in the USA, in Russia, in Luxembourg and in Mexico.  Cement shipments fell by 20.6% to 19.7m tonnes, with the strongest volume reductions taking place the Ukraine and in Russia, with only Mexico showing a an improvement in volumes.  Ready-mixed concrete deliveries were somewhat less badly affected overall and declined by 18.9% to 10.5Mm³. 

In Italy, turnover declined by 17.9% to €540.4m and the underlying EBITDA fell by 47.6% to €59.9m.  Cement shipments, including exports, declined by 16.9% and prices weakened in the light of weak demand that increased competitive pressures though with some relief coming from lower energy costs.  The full year volume decline may be a little lower than the race of the first nine months.

German turnover declined by 12.8% to €401.3m and the underlying EBITDA fell by 21.8% to €59.8 after ignoring exceptional gains of €37.4m.  Cement volumes, which had additionally been affected by the cold winter, declined by 14.7% to 3.63m tonnes and ready-mixed concrete shipments fell by 23.0% to 1.94m m³.

Eastern European turnover dropped by 50.1% to €367.4m and the EBITDA shrunk by 69.3% to €95.7m.  The Polish turnover was down by 35.8% to €95m and the EBITDA fell by 51% to €29m, with cement deliveries being down by 9.0% to 1.12Mt and ready-mixed concrete deliveries fell by 17.7% to 0.61m m³, with average cement prices being down by 0.2%.  In the Czech Republic and Slovakia, the cement price improved by 1.2% though volumes were 21.1% lower at 0.66Mt, while ready-mixed concrete shipments were 30.6% down at 1.27m m³ and the aggregates tonnage declined by 12.6% to 1.12Mt.  The Ukraine delivered the worst performance, with cement sales falling by 48.8% to 1.06Mt and concrete volumes dropping by some 72%.  The falling volumes and the falling currency let to a 67.0% drop in turnover to €59m and a €5m EBITDA loss was incurred compared with a €60m profit last year.  In Russia, cement shipments fell by 39.5% to 1.06Mt and with a 35% drop in prices, the turnover dropped by 63.7% to €77m and the EBITDA by 75.7% to €36m.

In the United States, turnover declined by 10.9% to €494.0m and the running EBITDA fell by 21.0% to €111.4m.  Cement deliveries fell by 23.2% as Alamo’s volumes also went into reverse and average prices suffered a 4.2% reduction.  The lower capacity utilisation across the industry has tended to increase price volatility in some markets