Italian and French winters again disrupt Italcementi

Italcementi's first-quarter turnover declined by 9.3 per cent to €964.8m and the running EBITDA fell by 32.7 per cent to €88.5m. The €21.3m trading profit a year earlier dropped to a €16.5m loss and the pre-tax loss jumped from €3.4m to €36.9m, though the net interest charge was 10.1 per cent lower at €25.7m. The net attributable loss jumped by 59.9 per cent to €78.2m.

Net debt at the end of March was 3.4 per cent lower at €2105.9m, to give a gearing level of 51.3 per cent, compared with 45.5 per cent a year earlier. There were no gains from the sale of emission rights, compared with a €19m gain at that stage last year, while capital expenditure was reduced by 21.2 per cent to €64.5m.

Cement and clinker shipments were 10.0 per cent lower at 10.0Mt, as international trading activities showed a 21.1 per cent volume decline to 0.6Mt. Turnover from cement and clinker trading fell by a further 23.2 per cent to €39.8m, but the EBITDA did improve by 6.9 per cent to €1.9m. Aggregates shipments were down by 11.7 per cent to 7.0Mt and ready-mixed concrete deliveries declined by 9.2 per cent to 2.8m m³.

The Western European cement and clinker volumes declined by 18.6 per cent to 3.04Mt. Consolidated aggregates shipments were down by 13.6 per cent to 6.18Mt and ready-mixed concrete deliveries fell by 17.2 per cent to 1.81Mm³. In France and Belgium, turnover declined by 9.7 per cent to €319.3m and the EBITDA contribution came down by 21.0 per cent to €37.3m. Cement and clinker volumes, including exports, were down by 12.7 per cent. For the year, volumes are expected to decline by between five per cent and 10 per cent in France and by 10 per cent to 15 per cent in Belgium. Prices should be stable in France this year, but are likely to ease somewhat in Belgium.

The Italian cement and clinker volumes dropped by a further 36.7 per cent to 1.1Mt, having already fallen by 27.9 per cent in the first quarter of last year. Including exports, volumes for Italy were down by 25.1 per cent. The Italian cement market is expected by Italcementi to fall by at least 20 per cent this year, but the positive pricing trend should be maintained. Given current market conditions, bankruptcies must be expected in the very fragmented ready-mixed concrete industry. Turnover in Italy fell by 22.3 per cent to €150.5m and the loss at the EBITDA level jumped from €5.6m to €21.5m.

The Spanish turnover fell by another 28.9 per cent to €21.7m and an EBITDA loss of €0.5m was incurred, compared with a €1.40m profit a year ago, but the trading loss was actually reduced from €4.7m to €4.4m. Total cement and clinker volume fell by 27 per cent, though domestic cement deliveries were down by slightly a more modest 19.8 per cent. In Greece, turnover declined by 13.1 per cent to €5.0m and the EBITDA loss rose from €0.6m to €1.4m, as cement and clinker volume fell by 20.7 per cent. Domestic cement deliveries, however, managed a 2.4 per cent recovery, though prices softened. Bulgarian turnover rose by 38.3 per cent to €10m, but in the absence of receipts from the sale of emission rights the business only broke even at the EBITDA level. Cement and clinker sales did rise by 46.7 per cent, though domestic deliveries were ahead by just 12.9 per cent.

Egyptian turnover declined by seven per cent to €136.4m, but the EBITDA recovered by 6.2 per cent to €37.6m as prices were increased. Domestic cement deliveries declined by 10.7 per cent, as production was limited because gas shortages and higher gas prices, leading to reduced exports to Libya and to increased imports, with the overall cement and clinker volume being down by 17.5 per cent. The group is now working on diversifying its kiln fuel mix.

The Moroccan turnover was down by 12.4 per cent to €80.1m and the EBITDA declined by 9.5 per cent to €37.1m as cement and clinker volume, including exports, declined by 16.6 per cent. Morocco is now seeing slightly higher prices, but slightly lower volumes. In Kuwait, turnover declined by five per cent to €15m and the EBITDA was also down by some 15 per cent to €1m, with cement deliveries improving by 2.4 per cent.

The Asian turnover showed a 12.3 per cent recovery to €136.0m, but the EBITDA was off by 6.0 per cent to €19.7m, while the trading profit came down by 25.2 per cent to €6.8m. The Indian turnover was off by 4.1 per cent to €61.3m and the EBITDA fell by 28.8 per cent to €10.9m, with cement and clinker volume improving by 7.0Mt. Pricing, however, was under pressure in large parts of the trading area. In Thailand, turnover rose by 24.7 per cent to €66.5m and the EBITDA staged a 32.9 per cent recovery to €9.1m. Cement and clinker deliveries rose by 11.2 per cent and ready-mixed concrete deliveries jumped by 50 per cent. In Kazakhstan, cement shipments rose by 96.7 per cent and turnover more than doubled to €8.2m, leading to the quarterly winter loss being reduced to €0.3m.

The North American turnover came off by 7.2 per cent to €74.1m, following the 25 per cent jump a year ago, but the loss at the EBITDA level narrowed by a further 7.7 per cent to €11.7m. Cement shipments were 3.9 per cent lower at 0.73Mt. A US price increase was successfully implemented in January, but Canadian prices face some pressure.