Except for North America, Italcementi has an excellent start to the year

Except for North America, Italcementi has an excellent start to the year
Published: 08 May 2007

With only North America and Thailand showing lower domestic cement deliveries, Italcementi’s first quarter cement and clinker shipments increased by 7.6% to 15.3Mt. Yet higher volume growth was registered in the downstream operations, with deliveries of aggregates and ready-mixed concrete being ahead by 10.7% to 14.4Mt and by 11.4% to 5.4Mm³ respectively.  Group turnover rose by 9.9% to EUR1418.0 and the running EBITDA increased by 6.4% to EUR282.6m, with the trading profit rising by 12.4% to EUR176.1m.  However, a 30.0% increase in the net interest charge to EUR35.4m reduced the increase at the pre-tax profit level to 10.0% to EUR142m.  Capital investment and financial investments in the period amounted to around EUR215m to give a net debt at the end of March of EUR2951.7m, which represents a gearing level of 43.2%.
Western European cement and clinker volumes advanced by 4.6% to 6.5Mt, out of which the Italian operations accounted for 3.4Mt. 

The Italian turnover rose by 5.2% to EUR398.9m, with the EBITDA improving by 5.8% to EUR46.9m, while in France growth was considerably stronger, with turnover increasing by 13.3% to EUR382.0m and the EBITDA by 12.9% to €71.7m as cement deliveries increased by some 8%. Between them, Spain, Belgium and Greece produced a turnover 16.8% higher at EUR177.0m, but the profit performance was more modest than in France and Italy.  The outlook for prices is stable for Italy and Belgium and positive for the three other countries.

Unfavourable weather and the drop in housebuilding activity combined to reduce the North American cement sales by a quarter to 1.1Mt.  The turnover declined by 27.3% to EUR98.9m with the EBITDA dropping by 85.3% to EUR3.3m and incurring a seasonal trading loss of EUR7.8m as higher maintenance costs were also incurred.  In spite of the reduction in volumes, cement prices are now around US$3/t higher than a year ago.