S&P puts Buzzi Unicem, Dyckerhoff ratings on credit watch

S&P puts Buzzi Unicem, Dyckerhoff ratings on credit watch
Published: 09 August 2013


Standard & Poor's has placed Buzzi Unicem’s rating on credit watch with negative implications, the Italian cement major announced in a statement. Buzzi Unicem's corporate rating is currently at BB+/Stable/B.

The rating for Dyckerhoff AG, Buzzi Unicem’s wholly-owned subsidiary, has also been placed on credit watch.

S&P said the decision was due to first-half results which were lower than expected in some key market, particularly Italy, Mexico and Eastern Europe.

For the first half of the year, Buzzi Unicem saw Italian cement and clinker volume declined by 13.6 per cent. Italian turnover came off by 17.5 per cent to €202.6m and the loss at the EBITDA level rose from €0.9m to €17.8m, after charging impairment provisions on trade receivables of €10.7m. 

Its 50 per cent-controlled Mexican associate Corporaciòn Moctezuma suffered from a weaker market and increased competitive pressures. A revaluation of the Mexican currency, compared with a devaluation this time last year, boosted the numbers on conversion, reducing the negative impact of the more difficult market.  Turnover declined by nine per cent to €119.8m, while the EBITDA came off by 15.4 per cent to €42.1m. 

In Eastern Europe, Poland weakened further and turnover fell by 14.3 per cent to €45.5m and the EBITDA decreased by 8.0 per cent to €9.1m  Cement volumes was down by 6.5 per cent to 0.61Mt and prices by 6.6 per cent in local currency, while ready-mixed concrete deliveries fell by 18.3 per cent to 0.28Mm³ and prices by 8.2 per cent.  Czech and Slovak turnover fell by a further 16.2 per cent to €53.8m and the EBITDA dropped by 53 per cent to €3.7m. Cement volumes fell by another 16.7 per cent to 0.31Mt.