Italcementi H1 EBITDA flat as Egypt inclusion offsets weak Italy

Italcementi H1 EBITDA flat as Egypt inclusion offsets weak Italy
Published: 15 September 2005

Italcementi SpA’s first half EBITDA due on Friday is expected to be broadly flat, with the first-time inclusion of its Egypt acquisition Suez Cement, offsetting weak Italy activities, analysts said. 

Net profit is seen at EUR156.8-166m, against 129.4m a year earlier, EBIT EUR359-380m, against EUR348.6m, EBITDA 510-545m, from 538.2 mln, and sales 2.388-2.404 bln, from 2.262 bln. 

’Our forecast of flat performance is based on a sharp drop in the Italian contribution (down 28 mln eur) and the first time consolidation of Suez Cement (plus 21 mln),’ said Exane BNP Paribas. 

’We also include a net positive contribution from other countries of 9m Eur, despite a very low first quarter, which was hit by disastrous weather and low contributions from Thailand, because of a price effect, and Greece, because of a volume effect,’ it said. 

The rise in net profit is attributed to the end of goodwill amortisation and a lower tax rate, it said. 

Analysts said that Italian results will be down on lower cement prices, while second quarter volumes should make up for weak first quarter volumes, down on the poor weather, analysts said. 

Milan broker Caboto said it sees EBITDA margin at the Italian operations down at 17 pct, from 19.3 a year earlier, with higher energy costs weighing. 

First half sales in Italy are expected to fall 2.4 per cent to 778m Eur, it said in a note earlier this month. 

In a note, JP Morgan said the Ciments Francais unit, which owns Italcementi’s activities outside Italy will post a 9 per cent rise in EBITA, without giving EBIT or EBITDA data. 

’We expect lower profit contributions from Ciments Francais businesses in Belgium, Greece and Thailand to be offset by growth from elsewhere, mainly north America, Spain and Turkey, it said. 

Looking ahead, Exane BNP Paribas said it does not expect a significant improvement in Italcementi’s guidance for the full year. 

In May, Italcementi said it would be ’more difficult’ to meet its full year forecast for an operating profit in line with 2004 on a like-for-like basis.