Titan reported H107 sales down 1% to EUR757.3m and EBITDA up 3% to EUR221.8m. Net income increased from EUR120.4m to EUR126.1m, 7% below consensus expectations of EUR134.8m.
The lower results are due to the continuing US housing slowdown, a weaker second quarter in Greece following a strong Q1, and the one-off negative effect of the temporary shut down of Titan’s Egyptian plant. However south-eastern Europe (Bulgaria, Serbia, FYROM) performance was very strong.
Visibility in the US is low where Titan is facing uncertainty about demand from residential construction activity and on the issue of quarrying permits in the Lake Belt district (Florida). Titan (and two of its competitors) recently had to stop mining in the area.
Exane-BNP analysts say that they will have to adjust down our estimates to reflect this publication.