Italcementi maintains volumes

Italcementi maintains volumes
Published: 27 March 2008

Italcementi achieved a 2.5% increase in turnover last year to EUR600.9m, in spite of Calcestruzzi not being consolidated for the final quarter and, on an underlying basis, turnover rose by 3.6%.  The EBITDA, on the other hand, declined by 3.0% to EUR1,403.9m as higher costs could not be fully recovered, and the trading profit emerged 5.4% lower at EUR958.0m.  Higher financing costs led to a 7.2% reduction in the pre-tax profit to EUR851.9m, but a lower tax rate and lower minorities left the net attributable profit just 5.7% lower at EUR423.9m.  Capital investment was 7.5% higher at EUR542.0m and a further EUR458.0m went on acquisitions, of which EUR302m were spent on buying out minorities in France and Egypt. Net debt at the end of the year was 9.4% higher at EUR2,418.2m to give a gearing level of 50.8%, compared with 47.4% a year earlier.  Shipments of cement and clinker increased by 1.1% to 64.63m tonnes in 2006, while the aggregates tonnage declined by 5.1% to 56.28Mt. 
European cement and clinker volumes declined by 3.0% to 25.87Mt, out of which the Italian operations accounted for 13.7Mt.  The de-consolidation of Calcestruzzi from October, as the operation was placed under court supervision, contributed to the 7.3% reduction in Italian turnover to EUR1,301.7m, and the EBITDA dropped by 14.2% to EUR192.4m. Weaker Italian cement demand led to lower domestic volumes and the higher energy costs could not be fully passed on in the softer market.  The Calcestruzzi affair also brought down the downstream volumes in Western Europe, which declined by 14.3% for ready-mixed concrete and by 5.9% in aggregates, though the underlying volume reductions were respectively 1.3% and 2.5%.
The de-consolidation of Calcestruzzi made France the biggest contributor to turnover, up by 7.1% to EUR1593.4m, as well as profits, with the EBITDA advancing by 4.5% to EUR344.9m as Ciments Français was able to pass on the higher energy costs and increased volumes in cement and aggregates. In Belgium, turnover rose by 10.7% to €235.1m and the EBITDA by 9.7% to €52.8m thanks to higher prices. Spanish cement volumes declined in Andalusia but improved in the Basque Country, with turnover rising by 6.3% to €362.5m and the EBITDA advancing by 4.3% to EUR89.2m.  The Greek domestic volumes and profits declined, but margins still edged ahead and the downstream activities on Crete were sold at the beginning of 2008. 

North American cement shipments dropped by 11.6% to 6.23m tonnes as US housebuilding activity continued to fall and the decline in the residential market was only partially offset by higher volumes going into non-residential building and civil engineering.  The reduction in turnover was partially mitigated by the acquisition of downstream operations in the United States and Canada, and higher cement prices, limiting the reduction to 8.2% to EUR605.7m, but the EBITDA was still hit hard and dropped by 18.5% to €127.6m.  Thanks to acquisitions, the aggregates volume rose by 31.4% to 0.28Mt while ready-mixed concrete deliveries went from a nominal amount to 0.85Mm³.