Buzzi Unicem improves margins thanks to Dyckerhoff
Underlying turnover at the enlarged Buzzi Unicem group increased by 6.1 per cent to €2,097.2m during the first nine months of 2004 and the operating profit at the EBITDA level showed a 13.0 per cent advance to €549.0m on the same basis, but currency movements, principally the weaker dollar, reduced the actual increases to 2.0 per cent and 7.6 per cent respectively. Cement deliveries were 3.6 per cent higher at 24.3Mt on a comparative basis and ready-mixed concrete deliveries rose by 3.3 per cent to 11.4m m3.
The Italian cement and clinker volumes rose by 6.0 per cent and there was some improvement in selling prices. Lower supplies to major infrastructure projects in northern Italy, however, led to a 1.2 per cent reduction in ready-mixed concrete deliveries. Cost pressures in cement, particularly on the energy side, led to some reduction in margins as turnover rose by 2.8 per cent to €725.4m but the EBITDA only advanced by 1.4 per cent to €203.1m. Italian cement demand is set to continue to run at high levels but the higher costs for kiln fuel, electricity and material for maintenance is currently only partially being compensated for in higher prices. As a result, profits for the year are expected to be broadly stable.
In a German cement market that is expected to fall by 4 per cent this year and by a further 4 per cent in 2005, Dyckerhoff’s cement deliveries were some 4.6 per cent lower. Prices, however, are recovering and turnover rose by 4.3 per cent to €377.8m with the EBITDA more than doubling to €46.6m as the margin jumped from 5.3 per cent to 12.3 per cent. A further price increase of €9.50 per tonne has been announced from next January. Ready-mixed concrete markets remain highly competitive in some important urban areas such as Frankfurt/Main and the Ruhr basin, and there it has not been possible to implement cement price increases to date to the full. Ciments Luxembourgeois increased cement shipments by 7.4 per cent but average prices were slightly lower, though margins improved and on a turnover 12.1 per cent higher at €103.9m, the EBITDA rose by 58.4 per cent to €23.8m, with the domestic market being broadly stable.
The 50 per cent-owned Corporación Moctezuma had the benefit of the new Cerritos cement plant coming on stream in May and increased cement deliveries by 13.1 per cent. Cement prices were stable in local currency terms and the ready-mixed concrete volume rose by fore than 18 per cent. The company’s results were affected by the drop in the value of the peso, with turnover 0.3 per cent higher at €99.4m and the EBITDA down by 5.0 per cent to €56.6m, which still represents a highly respectable margin of 46.9 per cent. The reduction in the margin from 49.5 per cent last year reflects the higher relative importance of the downstream operation as well as higher production and distribution costs in Mexico.
