Titan advances despite weaker Greek market

Titan advances despite weaker Greek market
Published: 26 August 2005

Turnover in the first half rose by 12.2 per cent to €612.9m, which amounts to a 14.7 per cent increase at constant currencies.  The operating profit at the EBITDA level advanced by 11.1 per cent to €161.3m.  Net debt at the end of June stood at €494m to give a gearing level of 64.9 per cent .  The group’s cement volumes rose by around 7 per cent to 7.2m tonnes, helped by the full availability of the new Pennsuco works in Florida.  Ready-mixed concrete deliveries were some 5% ahead at 2.7m m³, while aggregates shipments, where Greece weights in more heavily, were 7 per cent lower at 9.9m tonnes. 
Domestic cement deliveries in Greece fell by 11.0 per cent during the first half, though in the second quarter the rate has slowed to 4 per cent compared with a 19 per cent drop in the first three months.  Turnover declined by 8.3 per cent to €247.1m.  The increased fuel cost has been broadly offset by a combination of price increased efficiency improvements, but the volume effect on the domestic market did feed through to margins and the EBITDA declined by 18.5 per cent to €73.8m.
The south-eastern European markets outside Greece contributed a turnover 37.7 per cent higher at €67.2m as the full effect of the Zlatna works in Bulgaria was being felt and the EBITDA advanced by 19.4 per cent to €19.1m.  The Bulgarian cement demand continues to grow and Titan has had to buy additional clinker in order to supply demand, which has had a negative effect on margins and €40m is being invested at the Zlatna works over next three years to increase capacity.  Cement demand in Serbia is showing signs of beginning to recover, while the Macedonian cement market is stable.  However, in neither of the two countries have the higher energy costs been fully passed on in the cement prices. 
The US operations reported increases in turnover and EBITDA of 37.1% and 97.6 per cent respectively in local currency terms.  On conversion, turnover rose by 31.3 per cent to €275.3m and EBITDA by 89.4 per cent to €57.0m. The improvement reflected a full period’s contribution from the new Pennsuco works and the new import terminal at Tampa, as well as strong demand and pricing.  Titan did start implementing a second cement price increase this year in July in its US operations, which are vertically integrated in Florida and Virginia.
The proportionately consolidated Egyptian joint venture with Lafarge, contributed a 28.7 per cent increase in turnover to €23.3m and the EBITDA advanced by 32.5 per cent to €11.4m, a domestic cement demand began to show signs of beginning to recover.