Dyckerhoff sees benefits of Buzzi-led restructuring

Dyckerhoff sees benefits of Buzzi-led restructuring
Published: 11 May 2004

The first quarter results from Dyckerhoff, now a subsidiary of Buzzi Unicem, show a 20.1% fall in turnover to €203m, but excluding changes to the sphere of consolidation, notably the sale of Hispania and of the stake in Anneliese Zementwerke and the merger of the North American business with Buzzi Unicem’s RC Cement, the decline was more like 3%.  The operating profit at the EBITDA level improved by half to €15m thanks to the cost reduction programme. 

Turnover in Germany declined by 19% to €92m, but the profit line improved by €10m, with some help from improving cement prices.  Better weather boosted construction activity but underlying cement demand still fell by an estimated 2% after taking into account higher hidden cement exports to The Netherlands and Belgium.   A delay in some infrastructure projects led to a 4.5% decline in cement deliveries in Luxembourg during the period but prices are stable.  After a weak start to the year, Polish cement deliveries rose very sharply in March ahead of an increase in the rate of VAT on building materials from 7% to 22% on the 1st of May.  Cement deliveries in the Czech Republic rose by some 11% but prices weakened by between 3% and 4%.  Further east, favourable weather led to strong volume gains in the Ukraine and in Russia.  Prices were strong in Russia and in the Ukraine they rose by a quarter, albeit from a very low level. 

The North American turnover fell by around 20% to €71m from a combination of a weaker dollar and the effect of holding only 48% of the enlarged RC Cement Co, but the financial strength of the new US company led to reduced interest costs.   Price increases of US$2 to US$ 3 per short ton have been introduced across RC Cement’s markets and a second price increase looks possible, at least in some markets.