Italcementi cuts FY opg guidance after Q3 profits miss expectations

Italcementi cuts FY opg guidance after Q3 profits miss expectations
Published: 07 November 2007

Italcementi SpA has cut its guidance for full-year operating profits after its third-quarter results came in below market expectations.  
 
The Italian cement group said it now sees full-year operating results close to or slightly below 2006’s, against a previous indication of in line results, and repeated that net profit will be lower due to tax charges.  
 
The company said the recession in the US residential sector should continue and that there might be increased signals of a slowdown in some European countries like Italy, Spain, and Greece. 
 
For the fourth quarter, it said results should be in line with 2006.  
 
Italcementi said third-quarter net profit fell to EUR106.8m from EUR122.6m a year earlier, recurring EBITDA to EUR385.6m from EUR398.3m, both missing expectations, while sales rose a higher-than-expected 3.9 per cent to EUR1.540bn.  
 
Analysts polled by Thomson Financial News had expected a net profit of EUR114m, a recurring EBITDA of EUR393.5m, and revenues of EUR1.521bn.  
 
Net debt was 2.408 bln eur at the end of September, up by EUR197.7m compared to end-Dec, it said.  
 
Italcementi said turnover in all its markets except Italy and Greece rose thanks to price increases, but margins declined as operating costs rose.  
 
In Italy, revenues and profits fell as higher prices were outweighed by a slowdown in consumption and higher costs, while in France, both volumes and prices rose.  
 
On North America, it said forecasts on cement consumption in 2007 and 2008 have been cut due to the crisis in the real estate sector, but volumes in the quarter fell at a much lower pace compared to the first half and prices in local currency rose.  
 
In Egypt, operating results were hardly hit by higher energy and staff costs, while both prices and volumes rose, boosted by the residential and tourism sectors.  
 
Group cement and clinker sales volumes rose 1.3 pct to 16.6 mln tonnes including the Fuping Cement plant in China, with a good trend in emerging countries, notably Morocco, offsetting declines in mature markets, mainly North America and Italy.  
 
Concrete sales volumes rose 8.1 per cent to 5.7Mm3 thanks to recent acquisitions, with rises in Egypt, France, North America and declines in Turkey, Italy, and Thailand.  
 
On a like-for-like basis, cement and concrete sales volumes fell slightly, but at a lower pace compared to the previous quarter, it said.  
 
Aggregates sales volumes fell 5.9 pct to 14Mt and were down 4.8 per cent on a like-for-like basis.  
 

 
FLSmidth AS said it has signed a contract worth slightly above 950 mln dkr to supply a complete cement plant to Russian cement producer LLC Cement, an affiliate of real estate company  LSR Group.
 
The order will contribute to FLSmidth’s earnings until it is commissioned in mid 2010.  
 
The cement plant, which will be ’energy and environmentally optimised’ and have a capacity of around 1.8 mln tonnes per year, will be built near the town of Slantsy, 200 km west of St Petersburg.  
 
FLSmidth chief executive Joergen Huno Rasmussen said the order confirms his group’s strategy for the Russian market.