Strong first quarter profits from Buzzi Unicem

Strong first quarter profits from Buzzi Unicem
Published: 14 May 2008

Buzzi Unicem’s first quarter cement sales declined by 4.5% to 6.8Mt because of the weakness of the Italian and US markets, but ready-mixed concrete deliveries did improve by 3.1% to 3.7Mm³, helped by the consolidation of businesses in The Netherlands and in the United States.  Prices generally improved, particularly so for cement in Russia, the Ukraine and Poland.  The consolidated turnover increased by 8.5% to EUR755.28m, not withstanding some adverse currency movements.  The improvement was more marked at the EBITDA level, with a 21.4% rise to EUR158.66m and the trading profit (EBIT) advanced by 34.0% to EUR109.35m.  A 14.2% decline in the net interest charge to EUR8.51m led to a 39.5% increase in the pre-tax profit to EUR101.80m.  In spite of a 76.4% jump in the minorities charge to EUR16.87m, the net attributable profit rose by 38.8% to EUR56.54m.
 
The net debt at the end of March was 29.7% higher at EUR805.5m, after having spent EUR11.0m on buying 35% stakes in two Algerian cement works and EUR41.0m on a grinding centre near Savona.  Capital investment was also higher, having increased by 57.1% to EUR102.3m, with the gearing level rising from 24.7% to 32.6%.
 
Italian cement and clinker volumes declined by 20.0% in response to a weaker market, wet weather in March and an early Easter.  Cement selling prices were increased to recover higher operating costs.  In ready-mixed concrete, volumes declined by 19.6%, but prices did improve by 4.9%. Turnover was down by 12.7% to EUR204.9m, while the EBITDA fell by 28.4% to EUR29.3m.    
 
The German cement plants increased volumes by 5.3%, mainly from higher exports, principally to The Netherlands, but ready-mixed concrete deliveries declined by 2.3%.  Dyckerhoff succeeded in raising its German cement prices by around EUR4/t and ready-mixed concrete prices were also increased.  The turnover increased by an underlying 12.7% to EUR117.6m, and a few batching plants were added, while the EBITDA trebled to EUR9.9m.  In Luxembourg, domestic cement shipments declined by 2.3%, but prices increased by 5.4%, with the underlying turnover rising by 8.9% to EUR19.5m but high maintenance costs virtually eliminating the EBITDA in the quarter.  The Dutch operations generated a turnover of EUR32.0m and an EBITDA of EUR1.0m.   
 
In Poland, cement deliveries rose by 39.1% to 0.32m tonnes and ready-mixed concrete shipments increased by 14.6% to 0.20Mm³, with turnover rising by 71.4% to EUR36m and the EBITDA by 66.7% to EUR10m.  Cement prices rose by 19.4% and ready-mixed concrete prices by around 17%.  The Czech and Slovak activities generate most of their turnover from ready-mixed concrete, where volumes increased by 25.8% to 0.49Mm³, while cement shipments increased by 28.1% to 0.2Mt, or by 32.7% including exports to Poland.  The turnover rose by 40.0% to EUR49m and EBITDA by 42.9% to EUR10m.