Italian and Thai prices depress Italcementi profits

Italcementi increased first half cement deliveries by 9.6 per cent to 26.2Mt, helped by the full consolidation of Suez Cement for three months, with the underlying volume increase being 2.3 per cent.  Group turnover rose by 6.2 per cent to EUR2,397.9m, of which cement represented 61.5% and ready-mixed concrete and aggregates a further 34.0%.  The EBITDA, however, declined by 5.2 per cent to EUR495.2m and the running profit before tax emerged 9.3% lower at EUR311.5m.  Net debt at the end of the period stood at EUR2,103.2m to give a gearing level of 55.8 per cent.
 
Operations in the European Union, which represented 50.4 per cent of cement, 81 per cent of ready-mixed concrete and 95.3 per cent of aggregates volumes, contributed a turnover 0.5 per cent higher at EUR1709.0m, with cement deliveries 0.6 per cent higher at 13.2Mt, but aggregates shipments declining by 6.6 per cent to 26.5Mt and ready-mixed concrete deliveries down by 4.2 per cent to 8.5Mm³. The EBITDA for the area declined by 13.8 per cent to EUR329.5m, principally because of Italy.  Italian cement shipments recovered in the second quarter to leave first half volume down by just 0.5 per cent, but prices had been declining since last September and only began to recover in May of this year, leaving average first half cement prices 3.9 per cent lower than in the corresponding period last year. Overall Italian turnover declined by 1.0 per cent to EUR790m and higher costs for fuel (+13 per cent) and electricity (+10 per cent) costs relating to reducing chrome levels led to a EUR46m decline in EBITDA to EUR99m. French cement and concrete volumes were broadly stable, leading to a EUR4m increase in EBITDA to EUR160m on a turnover 2.0 per cent higher at EUR679m as prices were increased to recover the increase in operating costs.  In Spain domestic cement shipments rose by 1.1 per cent on rising prices and the turnover advanced by 8 per cent to EUR55m, with the EBITDA being stable at EUR39m.  In Belgium, cement deliveries rose by 27.2 per cent as CCB recovered market share from imports, but prices were lower and turnover advanced by 12.3 per cent to EUR101m, with profits declining by EUR3m to EUR17m. The post Olympic decline in Greek domestic deliveries was only partially offset by increased exports, with domestic deliveries down by 16.3 per cent and overall volumes by 4.6 per cent while the Greek profit contribution was around one third lower at EUR13m.