Italcementi’s net profit falls by 37%

Italcementi’s net profit falls by 37%
Published: 04 August 2008

Italcementi’s first half turnover declined by 4.5% to EUR2,814.7m and the running EBITDA fell by 15.4% to EUR589.1m. The trading profit declined by 22.4% to EUR381.3m and the net attributable profit by 36.6% to EUR132.0m. The net debt at the end of June stood at EUR2,608.3m, equivalent to a gearing level of 58.7%.  Cement and clinker shipments in the first half declined by 1.4% to 30.2Mt, while the continued exclusion of Calcestruzzi produced sharper reductions in the downstream operations and deliveries of aggregates fell by 16.6% to 25Mt, representing an underlying decline of 4.5%, while and ready-mixed concrete deliveries dropped by 40.6% to 6.1Mm³.  
 
Cement and clinker volumes in western Europe declined by 7.9% to 12.51Mt, with most of the reduction coming in Italy and Spain.  The aggregates volumes fell by 18.4%, or by 5.6% excluding the Calcestruzzi effect, to 23.01Mt and ready-mixed concrete deliveries by 54.7%, or an underlying 6.3%, to 3.95Mm³. 

Italian cement volumes fell as construction activity declined and, while prices increased, this was insufficient to cover the higher costs and some market share was lost in an effort to recover the higher energy costs, in addition to the costs incurred in the rationalisation of the grinding and distribution net work.  The underlying Italian turnover emerged 0.4% ahead at EUR634.8m, while the EBITDA dropped by 38.9% to EUR66.3m.  The French cement business suffered from industrial action and capacity limitations, but higher prices benefited the ready-mixed concrete operations, with turnover rising by 3.1% to EUR843.9m, but the EBITDA declined by 8.7% to EUR173.5m.  The weakening of the Spanish market led to a 14.8% reduction in turnover to EUR161.7m, but the lower costs of the new Malaga cement plant limited the profit reduction to 17.3%.