Italcementi still targets Mediterranean markets
At its latest news conference, after releasing its preliminary results for 2004 Italcementi stated that it is to enhance its presence on the markets in the Mediterranean area. Among Italcementi priorities is the Egyptian market, where the Italian company has recently failed in an offer for taking over the control in local cement company Suez Cement. Italcementi will also aim at the Turkish market. The group also plans to make more investments in India. Italcementi generated a turnover of Euro 4.528bn in 2004, up 5.1 per cent year-on-year, and Euro 1.096bn in the fourth quarter of 2004, according to the preliminary results, approved by the company’s board of directors.
Italcementi also said its revenues were held back by currency swings. Chief Executive Carlo Pesenti said Italcementi had hedged at US$1.26 against the Euro. Earlier the dollar was trading at US$1.2968 against the Euro and in December it broke through US$1.36. "We expected an exchange rate of US$1.26 and that was wrong.... We have entered the market to cover that change," Pesenti said. "We are now hedging all costs, especially fuels," he added.
On a like-for-like basis - excluding foreign currency fluctuations, revenues from acquisitions and new ventures - full-year sales would have risen 7.1 percent. Fourth-quarter sales rose 5.1 per cent to Euro 1.096bn. Over the year, revenues grew strongest in Asia with an increase of 17.4 per cent to Euro 218.7m. Pesenti said he saw costs remaining high in 2005, and Italcementi could only partly pass them on to consumers.
Italcementi still wants majority control of Egypt’s Suez Cement but for now is pushing to revamp the state enterprise, its chief executive said on Thursday. The Egyptian government rejected the Italian cement maker’s takeover bid for Suez Cement in December because the price was too low, putting the brakes on one of Egypt’s major privatisation projects.
After buying shares from smaller investors, Italcementi now holds a 40 per cent stake in Suez while Egypt’s government owns 45 per cent. The total market value of Suez is US$945m. "We are not going to make another offer in the short term. We are now focusing on finding an agreement with the government to improve the company’s management," Chief Executive Carlo Pesenti told Reuters in an interview.
Asked if he was still interested in a majority stake, he said, "If the conditions are right, we will take that opportunity. We are in continuous contact with the government and are studying conditions to bring our relationship with the government to another level," he added. Pesenti said he would meet government representatives in coming weeks to discuss an industrial plan to improve logistics, marketing and efficiency at Suez Cement.
