Cimpor’s nine-months’ to September net profit is seen slightly lower on higher debt, while revenue is seen increasing due to strong demand in emerging-market countries where the cement maker is present.
Nine-month net profit is seen at EUR207m at BES, EUR209m at Banco BPI and EUR212m at Lisbon Brokers, compared with EUR214m in the same period last year.
Analysts said they see a higher debt burden taking its toll on financial charges. Additionally, last year, Cimpor benefited from the one-off gain resulting from the sale of Cementos Lemona, which boosted results in the first quarter of 2006.
Higher fuel costs this quarter and revamping works in some of the group’s plants -- which will soon come to an end – are also seen weighing on margins.
Meanwhile, revenue is seen as robust, boosted by the strength of operations in markets such as Brazil, Morocco, Tunisia and Mozambique.
For now, the Chinese contribution is expected to be negligible, with more significant results seen in the later part of the year.
The contribution to revenues from the group’s core Iberian market is seen as mixed, with revenue from Portugal seen hit by ongoing sluggishness in the construction sector, while the construction scare in Spain this summer is seen having limited impact.
Meanwhile, investors are still focusing on Cimpor’s bet in international markets. On Nov 12, Cimpor shares gained about 2 pct to 6.17 eur after analysts praised news that the company will invest 100 mln eur in a new cement and clinker plant in China’s Shandong Province.
Also, the stock has seen gains recently on revived speculation of a battle for control of the group, as traders said that a new entity resulting from a possible merger of Banco Comercial Portugues and Banco BPI could sell BCP’s 10 pct stake in Cimpor.