Italcementi Q1 EBITDA, sales boosted by Egypt ops, Italy prices

Italcementi Q1 EBITDA, sales boosted by Egypt ops, Italy prices
Published: 05 May 2006

Italcementi SpA’s first quarter EBITDA and sales, due today, will be boosted by the inclusion of Egypt operations acquired last year, and higher Italian selling prices, analysts said. EBITDA profit is expected at EUR190.6 – EUR 238m against EUR166.5m in the first quarter of 2005, while sales are seen at EUR 1.100 - 1.316bn, against EUR 990.2m, they said. 
’We are revising our estimates on Italcementi due to Lafarge’s solid results (May 2),’ said Societe Generale.  ’In addition to the consolidation of Egyptian operations, Italcementi should benefit from significant price hikes in the Mediterranean basin, Europe and the US,’ it said in a note. ’The company also benefits from an undemanding comparison base with the end of the price war in Italy,’ it said. 
The French broker said Lafarge reported price increases in most of the markets where Italcementi operates around the world. As a result, Societe Generale said it has increased its Italcementi forecasts sharply for prices and volumes in Egypt, Turkey, the US, Spain, and raised them slightly in France. 
ING analyst Antonio Tognoli said Italcementi’s first quarter will benefit from two acquisitions made in Egypt in mid-2005, while Italian cement prices went up 7 per cent , effective March 1, 2006.  The March price hike is being accepted in the Italian cement market, where Italcementi holds a 33-34 pct share, he said.  ’The price increase will have more of an impact in the second quarter. Italy volumes were substantially flat in the first quarter and will grow slightly in the second quarter,’ he said. The price increase has allowed Italcementi to pass onto its customers ’a big part’ of recent higher energy costs, he said.
Italcementi is on the lookout for acquisitions in the Mediterranean region, such as in Tunisia and Morocco, though negotiations mean these are unlikely to be sealed until later this year or next, he said.