Italcementi Q3 EBITDA may fall by up to 4.8 per cent despite higher revenues

Italcementi Q3 EBITDA may fall by up to 4.8 per cent despite higher revenues
Published: 01 November 2007

Italcementi SpA third-quarter results on November 7 may show an up to 4.8 per cent fall in recurring EBITDA despite a 1.5-3.7 per cent expected rise for revenues, as higher fuel and transport costs coupled with lower volumes in the key markets of Italy and the US should have more than offset cement prices increases, analysts said.  
Revenues are seen rising to EUR1.521bn from EUR1.481bn a year earlier, while recurring EBITDA should fall to EUR393.5m from EUR398.3m, according to an average estimate of six brokers polled by Thomson Financial News.  
Net profit after minorities is expected to fall to EUR114m from EUR122m, and EBIT to EUR279.42m from EUR291.7m, analysts said.  
In Italy and the US, revenues and margins are seen lower; in France, revenues are seen higher and margins flat; while in Egypt, strong margins are seen under further pressure and revenues rising, a local analyst said.  
Italcementi’s key markets – Italy, France, North America, and Egypt – together contributed nearly 74 per cent to revenues in the first half of the year.  
Spain is expected to post higher sales and margins; in Turkey, revenues should grow and margins fall, while in all emerging markets but Thailand, revenues and profitability are expected to rise, the domestic analyst said.  
Italcementi will hold a conference call on November 7.  
’The market is likely to focus on margins in Italy and on whether the group has been able to recover some profits from price increases,’ an analyst at a European bank said.  
This analyst added that another point of interest will be the evolution of margins in Egypt, but also Spain, where he expects ’the market to slow down going into next year’.  
He also said there is talk of a potential price war in Turkey.  
On outlook, a couple of analysts said they do not expect the company to change its full-year guidance, and one said that at present ’there are good chances that results in 2008 might be as unexciting as in 2007’.  
Italcementi expects 2007 operating results to be in line with 2006 and net profit to decline due to tax charges.