Titan’s turnover in the first half eased by 1.0% to EUR757.3m because of the drop in the United States, but the EBITDA still improved by 3.4% to EUR221.8m. Sales of cementitous materials, which had been ahead by 6.9% in the first quarter, were 1.3% lower for the six months at 7.76Mt. However, aggregates shipments rose by 6.3% to 10.79Mt and ready-mixed concrete deliveries were helped by acquisitions and improved by 2.7% to 3.00Mm³, though at the underlying level there was a decline of some 3% because of the reduced demand in the United States.
Greece and Western Europe contributed a turnover 12.9 per cent higher at EUR316.5m and the EBITDA increased by 27.8% to EUR102m. The Greek activities came back to a more normal level after an exceptionally strong, housing related, performance in the second half of last year and the first quarter of 2007. Greek cement prices have been increased to take account of the rise in kiln fuel costs, primarily consisting of pet-coke. Two ready-mixed concrete businesses were purchased during the half year, increasing the level of Greek downstream integration.
South Eastern Europe performed strongly with cement volumes rising by around 22% and turnover increasing by 28.7% to EUR98.9m. The strongest growth was seen in Serbia, but both Bulgaria and Macedonia also saw volumes move ahead. The 66.7% increase in the EBITDA to €43.0m owes much to the replacement of imported clinker and cement with own production as a result of the completion of the investment to expand the Zlatna Panega works in Bulgaria.
The weakness in the US housing market and the weaker dollar have affected the American numbers, with turnover falling by 17.0% to €313.0m and the EBITDA dropping by 31.9% to €62.7m. A more serious problem has emerged in Florida, where a judge has ordered extraction to stop at a major part of the Pennsuco quarry that supplies the cement the Pennsuco cement plant and is also a major producer of aggregates. Titan is appealing against the judge’s decision and is putting a number of contingency plans into operation. Last year, the operations in Florida accounted for some 16% of the group’s EBITDA. The impact is being somewhat mitigated by the continuing weakness in the US housing market, particularly in Florida, and by the expansion in downstream operations in North Carolina and South Carolina.
Titan signs turnkey contract with CBMI for new Albanian plant
Titan Cement Group announced yesterday that its subsidiary in Albania Antea Cement Sh.A., signed in Tirana a turnkey contract for the construction of a new cement plant in the area of Boka e Kuqe near Kruje. with the specialized Chinese cement equipment manufacturer and contractor, CBMI Construction Co. Ltd.
Titan Group has secured a 99 years lease and right of use for the quarries and the land of the Plant, through an agreement with the competent authorities which has been ratified by the Albanian Council of Ministers.
Titan’s greenfield investment is expected to be operational in December 2009 and will be built to the most advanced specifications in environmental standards. Cement capacity will be of a 1.5Mta and will allow the supply of the Albanian market as well as exports to the international markets. The investment includes the development of the required quarries, infrastructure and logistics.
The total project cost is estimated at €170m and will be financed by the Titan Group. The International Finance Corporation (IFC) and the European Bank for Reconstruction & Development (EBRD), could potentially participate in part of the project as equity investors, both of which are in advanced negotiations with Titan.