Cimpor up in spite of Portuguese drop

Cimpor up in spite of Portuguese drop
Published: 16 March 2007

Cimpor improved cement shipments by 3.2% in 2006, to 20.45Mt.  Downstream volumes declined as the dependency on the sharply declining Portuguese market is much greater here, and the aggregates volume fell by 2.0% to 12.97Mt while ready-mixed concrete deliveries were off by 1.6% to 6.94Mm³. 

The group increased its turnover last year by 6.8% to €1,638.9m, with margins widening as the EBITDA moved ahead by 13.6% to €563.0.  The trading profit (EBIT) rose by 14.8% to €408.1m, while a higher interest charge reduced the improvement in the pre-tax profit to 3.9% at €365.8m. Cash generation was helped by the divestment of some minority stakes and net debt declined by 13.5% to €937.0m, to give a gearing level of 56.7%.  
 
The continued recession in the Portuguese construction market led to a 10.2% decline in domestic turnover to €462.9m and the EBITDA fell by 5.0% to €173.9m, though the deterioration in margins was halted, with an improvement from 31.7% to 32.7%. Portuguese cement and clinker shipments declined by 4.2% to 5.85m tonnes as domestic deliveries fell for the fifth consecutive year.  The ready-mixed concrete volume dropped by 15.7% to 3.14m m³, while aggregates deliveries declined by 13.6% to 7.61m tonnes.  Spain, on the other hand, continued to grow and is fast approaching Portugal in terms of turnover, achieving a 15.2% increase to €427.2m. Helped by a 1.9% increase in cement volume to 4.36m tonnes and higher prices, the EBITDA rose by 39.7% to €143.7m.  Aggregates shipments in the Iberian kingdom jumped by 19.1% to 4.49m tonnes, while the ready-mixed concrete volume improved by 6.9% to 2.80m m³.
 
In Egypt, Cimpor increased cement deliveries by 6.6% to 3.09m tonnes, with the EBITDA advancing by 30.7% to €63.3m on a turnover 21.3% higher at €114.7m.  An attempt to increase its Egyptian presence by acquiring Msir Cement in southern Egypt, which has a cement capacity of 1.6m tonnes and a national market share of around 3.5%, earlier in 2007 failed to attract sufficient acceptances to its E£80 per share offer and was allowed to lapse. Morocco posted the strongest volume growth, by 20.1% to 1.15Mt, helped by clinker sales.

This resulted in a 19.4% increase in turnover to €70.2Mt and the EBITDA jumped by 27.8% to €33.5m.   In Tunisia, cement shipments were 7.2% higher at 1.49m tonnes, resulting in a turnover 3.6% higher at €59.6m and the EBITDA improved by 19.8% to €17.5m.
 
Brazilian cement shipments rose by 4.7% to 3.97Mt and ready-mixed concrete deliveries forged ahead by 39.1% to 0.7Mt.  Turnover rose by 18.0% to €267.9m, but the existing price war led to 3.7% reduction in the EBITDA to €60.6m.  Not withstanding the price war, the Brazilian authorities announced earlier this month that they are investigating trading practices in the cement and ready-mixed concrete markets.