Italcementi H1 results seen up on stronger cement volumes, margins

Italcementi SpA’s first-half results, due today, are seen improving year on year, supported by stronger sales volumes and margins at its cement activities, analysts said.

EBIT is seen rising to 459-518 mln eur from 328 mln in the first half of 2005, while EBITDA is expected at 689-720 mln, from 495 mln. Sales are seen at 2.895-2.972 bln, from 2.398 bln, analysts said.

’There is growth in the first half from higher margins, compared to a year earlier. Prices are going well in all the countries where Italcementi operates,’ said Banca Akros’s Jacopo Majocchi.

The first half will also include a full contribution from Italcementi’s Egyptian operations, acquired during 2005, which has high margins, Majocchi said.

The Banca Akros analyst is looking for an update on Italcementi’s plans to establish a presence in China, and on further acquisitions in the Mediterranean region, such as the Middle East, including Saudi Arabia.

Italcementi has a ’very strict’ acquisition policy, to avoid overpaying for companies, and this prevented it making acquisitions recently in Turkey when there were privatisations, he said.

Higher sales and margins will offset the continued impact of higher fuel and transport costs, he said, noting the difficulty in some countries of using cheaper, alternative fuels.

In Italy, the cement market has picked up, though there are some uncertainties over the trend next year because of doubts on government support for major infrastructure works, he said.

Another Milan analyst said she expects the first half EBITDA margin to rise four percentage points from a year earlier to 24.6 pct, supported by Italian and international operations.

In particular, she highlighted considerable increases in cement prices in the US, Turkey, Egypt, and India.

A more limited number of analysts gave estimates for first half net profit of 175-235 mln eur, against the year-earlier figure of 154 mln.