Titan Cement reports higher earnings

Titan Cement reports higher earnings
Published: 25 February 2005

Titan Cement Company SA, Greece said on Thursday that group operating EBITDA for full-year 2004 grew by 9.3 per cent to Euro323 million from a year earlier,with group net profit after minorities and taxes totalling Euro169 million, up 35%. Group turnover was Euro1,104 million, showing a 6.6% rise versus 2003, managementsaid in a statement.Operating results were adversely affected by a rise in the Euro in 2004,especially versus the US dollar. 

 At constant exchange rates, turnover grew by11% and operating EBITDA by 12.6%, the statement said. Management attributed the growth in operating EBITDA exclusively to improvement in performance of international operations, which compensated for an anticipated drop in profitability in Greece after completion of preparations for the Athens Olympics. Improvement in net profit after tax was due to a positive balance in extraordinary results, mainly the result of the company’s foreign exchange policy, the statement said.

In Greece, domestic demand for cement in the fourth quarter continued to fall following its pre-Olympic Games peak. The effect of cost increases in fuel was partially offset by the benefit of more efficient performance due to plant modernization.In the US, market conditions continued to improve, with price increases underpinned by increased demand for Titan’s products. The newly modernized Pennsuco plant reached rated capacity, providing some much needed incrementalcement volumes in Florida; and a new terminal in Tampa also opened in December, the statement said.

The Group’s recent expansion in SE Europe had a positive impact on the group’s results. In Bulgaria, double-digit growth in demand was recorded; Serbia posted a small recovery; and in the Former Yugoslav Republic of Macedonia a marginal slowdown was experienced. In Egypt, price recovery was maintained as a result of re-orientation of excess production capacity towards exports, although domestic demand softened for the year, and was offset by a corresponding increase in exports.

For 2005, management forecast a greater contribution to operating profitability from international activities, mainly in the USA; but in Greece, a further decrease in demand is foreseen. Titan will invest in plant modernization, although at a lower rate compared to the last three years. Sales of the parent company, Titan Cement Company S.A., were flat at Euro 431million in 2004; operating EBITDA at Euro148 million was down 5%, reflecting a shift of volume from the domestic market to exports in the later part of the year, as well as cost increases in solid fuels, management reported. Increased depreciation charges totalling Euro 41 million together with an increase in provisions for staff retirement indemnities led to a 15% reduction in net profit after tax to Euro 95 million. Management will propose to shareholders a cash dividend of Euro 0.52 per share versus Euro 0.475 in 2003, the statement added.