Readymix posts EUR6.9m losses

Readymix posts EUR6.9m losses
Published: 27 August 2009

Readymix has reported a pre-tax loss of €6.9m for the first half of the year and warned that demand has continued to contract amid "exceptional weakness" in the housing and commercial construction markets.

Shares in the company closed down nearly 6% yesterday after it said revenue slumped 45% to €41.6m for the six months to the end of June.

Majority owned by Cemex, Readymix said in an interim trading statement yesterday that cost reduction initiatives have failed to offset a "serious reduction" in revenues, leading to €7.1m of operating losses being recorded for the first six months of the year.

The group, which also operates in Northern Ireland as Cemex NI, has also had to avail of a financial crutch from a Cemex subsidiary, securing a cash facility of up to €15m, but continues to have a strong balance sheet.

The operating loss for the period was an improvement, however, on the €9.7m figure reported for the first half of 2008. The company has cut 10% of its workforce since the end of last year due to market conditions.

It said it is focusing on appropriate asset allocation, and noted a series of major investment projects that commenced in 2007 are now operational, including the Millennium plant in Dublin and its Titanic Quarter plant in Belfast.

The company added that revenue from its aggregates unit tumbled 30% year-on-year in the first half of 2009, while turnover from the sale of concrete blocks, and other revenue, was 52% lower.

The number of houses being built in the country has slumped from record highs and led to a glut of rental property on the market.

Readymix said it expects "very demanding" trading conditions for the remainder of 2009 to continue into 2010.