Lower volumes hit Italcementi’s results

Lower volumes hit Italcementi’s results
Published: 09 May 2008

Italcementi’s first quarter turnover declined by 4.5% to EUR1306.6m, the running EBITDA was down by 5.3% to EUR260.9m and the trading profit fell back by 8.8% to EUR157.5m.  Between them, France and Egypt accounted for some 53% of the group’s EBITDA. 

Without the de-consolidation effect of Calcestruzzi, which remains under court administration, turnover would have risen by 2.8% but the running EBITDA would still have been lower, albeit by a more modest 3.8%.  The pre-tax profit fell by 13.0% to
EUR120.3m and net attributable profit for the period showed a 31.4% drop to EUR37.9m. 

The net debt at the end of March stood at
EUR2,306.5m, which represented a gearing level of 50.6%.  Cement and clinker shipments in the period declined by 3.2% to 14.13m tonnes, while the situation at Calcestruzzi produced sharper reductions in the downstream operations, with deliveries of aggregates falling by 17.2% to 11.96m tonnes and ready-mixed concrete volumes dropping by 42.1% to 2.83m m³. 
 
Western European cement and clinker volumes declined by 10.5% to 5.8Mt, with lower shipments in all five countries.  The aggregates volumes fell by19.0%, or by 6.4% excluding the Calcestruzzi effect, 11.06Mt, with improvements being seen in France, Belgium and, marginally, also in Greece.  Ready-mixed concrete deliveries declined in all markets, except for France and Belgium, with a 55.2% drop to 1.91Mm³. 

The Italian cement volumes fell by 15.7%, but a 13.9% increase in prices meant that al least the higher energy costs were being absorbed.  In addition, costs were incurred from the re-organisation of the grinding and distribution net work, leading to the closure of two Italian grinding centres and five distribution depôts.  The French cement business was hit by strikes in February though revenues still increased thanks to higher prices, though margins were hit.  Spanish volumes were down, in particular for concrete and aggregates sales in Andalusia.  The lower operating costs of the new Malaga cement plant enabled costs to be reduced and the trading profit was more or less maintained.