Semapa's 1H13 turnover declines

Semapa's 1H13 turnover declines
Published: 03 September 2013


In the first half of 2013, Semapa reported that turnover from its cement division fell 3.2 per cent YoY to EUR233.5m, essentially due to a drop in turnover in Portugal and Angola.

EBITDA in the cement business unit stood at EUR28.2m, up by 0.1 per cent on the same period in 2012. In the second quarter, EBITDA from cement business totalled EUR16.2m, up by 34.4 per cent from the previous quarter. This increase was largely due to a significant increase in sales in cement business in Portugal, generated by export activity.

Second-quarter sales showed a much stronger performance than the first quarter, up by almost 16.8 per cent and representing an increase of EUR18.1m, the group highlighted.

In Portugal, Semapa stressed that the construction sector remained in decline and the negative trend recorded in the previous year fell even further, with output in the construction sector down 19.4 per cent in the first five months of the year. Against these adverse conditions, cement turnover in Portugal fell 15.2 per cent YoY to EUR82.2m due to a reduction in sales volumes on the domestic market of 35.7 per cent. However, the first half saw an increase in export turnover (up 13.4 per cent) which benefitted from a change in the mix of products sold. EBITDA for the cement unit was down 31.5 per cent to EUR10.7m. The corporate reorganisation process launched in 2012 resulted in a reduction in personnel costs in the first half of 2013, although this was not enough to offset the drop in sales.

In Angola, Semapa saw a reduction in both sales volumes (-9.2 per cent) and average selling prices (-11 per cent) due in part to the start-up in 2012 of a cement mill in Benguela. The group also blamed “the continued placement on the market of cheap cement from China,” as a contributing factor to its decline in Angola sales. In response to this situation, Angolan manufacturers have been lobbying authorities for them to raise import tariffs and the government has agreed to do so, Semapa added.

Operations in Brazil (Supremo Group) performed significantly better, generating a first-half turnover of EUR26.1m. Brazil generated EBITDA of EUR2.5m.

In Tunisia, continuing political and social instability had a negative impact on the construction segment and cement consumption, with  a reduction of 2.3 per cent in the cement market as a whole and a six per cent drop in the southern region (the natural market for Semapa’s operations). The cement business unit recorded turnover of around EUR31.8m, up by 2.5 per cent YoY, thanks to significant growth in export sales. EBITDA was affected by the additional cost of having to purchase clinker due to an unscheduled stoppage of one kiln due to technical problems. Cement turnover in Lebanon saw a 4.9 per cent YoY increase to EUR40.4m, defying predictions of a cooler market.

On its outlook, Semapa said the outlook for its domestic market of Portugal remains bleak but that it is committed to implementing a series of cost-cutting measures across the entire structure (both in operatios and its central office) and has also embarked on a process of optimising its supporting functions.

The outlook for the Tunisian market still remains uncertain given the political, economic and social situation, but in Lebanon cement is forecast to stabilise and hold steady at 2012 levels. While the construction sector in Angola is expected to continue expanding, Semapa does not anticipate an improvement in results due to increased competition. In Brazil, the construction of a new cement mill will increase debt and bring down financial results, and consequently the group’s net income, until the new plant starts operation.