Italcementi begins to see Egyptian benefits

Italcementi begins to see Egyptian benefits
Published: 08 November 2005

Italcementi’s cement shipments reached 41.5Mt in the first nine months of the year, an underlying increase of 1.7% and an absolute advance of 13.8% as the group expanded, particularly in Egypt.  Interestingly, aggregates shipments were an identical 41.5m tonnes, but this represented a 4.5% decline and the ready-mixed concrete volume amounted to 15.9Mm³.  The turnover recorded an 8.6% advance to EUR3,720.8m, but unfavourable pricing in Italy and Thailand led to a narrowing of margins and the EBITDA advanced by just 0.7% to EUR848.3m.  This, however, represents an improvement in group profitability as the EBITDA in the first six months actually fell by 5.2%.  The trading profit was down by 5.6% to EUR581.2m though a 3.8% advance was posted in the third quarter.  The pre-tax profit was down by 4.2% to EUR570.4m and the net debt at the end of September was 21.5% higher at EUR2,556.3m, giving a gearing level of 65.2%. Capital investment so far has amounted to EUR317m, of which EUR93m has been in Italy, on top of which EUR758m has been spent on acquisitions, including the two Egyptian deals, two grinding stations in Italy and an increase in the stake in Ciments Français to 75.9% (or 86.2% of the votes).
 
Turnover in the European Union emerged 0.5% higher at EUR2,502.0m, but the EBITDA declined by 13.3% to €508.6m, as the lower profitability in Italy and Greece could only be partially offset by improvements elsewhere.  Cement deliveries were just 0.2% ahead at 19.42m tonnes, while aggregates volumes feel by 4.8% to 39.6m tonnes and ready-mixed concrete deliveries were off by 2.7% to 12.7m m³.  In Italy, cement deliveries were 0.7% lower and prices are recovering from a low point of around EUR58 per tonne in April to some €62 now. Group turnover in Italy declined by 2.4% to €1,112m and the EBITDA dropped by 32.8% to €160m.  In France, volumes declined by 0.7% in cement and by 0.3% in ready-mixed concrete, with turnover advancing by 2.4% to EUR1,004m and the EBITDA emerging 4.4% higher at EUR237m.  In Spain, where the group suffers from capacity constraints in the south and has to import, turnover rose by 6.4% to €234m and EBITDA was stable at EUR62m though cement deliveries were 1.6% lower. Belgian cement deliveries were 21.3% higher and pricing pressures have been reducing, with the result that turnover improved by 13.1% to EUR151m, with profits being just EUR1m down at EUR29m. The post Olympic effects was domestic deliveries in Greece drop by 10.6% but higher exports led to a 2.4% overall volume increase, with turnover 12.2% lower at EUR70m and the profit fell by almost 29% to €20m.