Asia leads Ciments Français’ growth

Asia leads Ciments Français’ growth
Published: 07 March 2008

Ciments Français, which covers virtually all of the non-Italian operations of the Italcementi group, improved turnover last year by 6.9% to €4,685.2m, but the EBITDA declined by 0.4% to €1.209.1m as a result of the US downturn.  The trading profit was off by 2.1% to €853.4m.  Financial charges were 1.0% lower at €93.1m, but a higher tax charge and an 11.7% increase in minorities to €97.7m left the net attributable profit 7.3% lower at €465.9m.  Capital expenditure and acquisitions emerged 22.9% higher at €403.0m, with the main investments taking place in the United States, Morocco, India and Spain.  Net debt at the year end was 2.4% higher at €1,511m, giving a gearing ratio of 41.2%, down from 42.4% a year ago.

Sales of cement and clinker rose by 2.4% to 51.7Mt and ready-mixed concrete deliveries, helped by acquisitions, advanced by 10.7% to 14.1m m³, but the aggregates tonnage was 1.0% lower 50.7Mt, in part reflecting a quarry closure in Spain because of the drop in demand there.  International cement and clinker trading produced a 9.0% increase in turnover to €337.2m, giving an EBITDA 3.1% higher at €18.1m.

In Western Europe, turnover rose by 6.0% to €2,170.1m and the EBITDA was ahead by 3.1% to €516.9m.  In France, turnover and profits improved, with volumes ahead in cement and aggregates and stable in ready-mixed concrete.  Domestic cement deliveries in Belgium were slightly lower, though up a bit in ready-mixed concrete.  In Spain, cement and aggregates volumes declined, but there was a slight increase in ready-mixed concrete, while in Greece volumes were lower across the board.

Bulgaria and the Mediterranean markets outside Europe, provided a 10.1% increase in turnover to €1,217.4m, with EBITDA moving up by 1.6% to 435.3m.  Bulgarian volumes and profits improved thanks to strong demand that enabled higher energy costs to be passed on.  In Egypt, on the other hand, price increases were not sufficient to cover all of the increase in fuel and electricity costs, but volumes continued to improve.  Turkish prices improved in cement but ready-mixed concrete volumes declined in a fiercely competitive market.  In Morocco, volumes and prices improved in a strong market that required clinker to be purchased in order to meet the cement demand.

North American cement volumes were in decline and the turnover fell by 8.3% to €605.7m and the EBITDA dropped by 18.5% to €127.6m as the decline in housebuilding activity was only partially offset by volumes going into non-residential building and civil engineering.

Asia provided the strongest performance, with turnover ahead by 23.0% to €444.2m and the EBITDA rising by 22.0% to €124.3m.  Only in Thailand was there a reduction in volumes as higher export shipments were insufficient to fully make up for the drop in domestic deliveries.  Indian production reached capacity and prices moved ahead while Kazakhstan showed further strong growth in both volumes and prices.   China made its initial contribution in the second half was Fuping Cement was consolidated from July.