Currency movements depress Cimpor profits

Currency movements depress Cimpor profits
Published: 22 May 2014

Tagged Under: Cimpor Results Portugal Europe Brazil 

Cimpor has reported an adjusted first-quarter turnover 6.8 per cent lower at EUR592.5m and the EBITDA declined by 9.7 per cent to EUR133.1m.

Measured in local currency, however, there was a profit growth rate of 15.3 per cent, but the euro strengthened considerably against most other currencies in which Cimpor trades. The trading profit (EBIT) was 8.8 per cent lower at EUR 89.8m. The net financial jumped from EUR28.9m to EUR 92.9m to give a pre-tax loss of EUR3.1m, compared with a profit of EUR69.5m a year earlier. At the net attributable level there was a loss of EUR10.8m, compared with a EUR47.2m profit. The net debt was 3.2 per cent higher at EUR3545m to give a gearing level of 300.6 per cent.

The consolidated cement and clinker deliveries increased by 12.2 per cent to 7.17Mt, with volumes being ahead in all countries with the exception of Argentina.

Turnover in Portugal showed a 6.9 per cent recovery to EUR 6.4m and the EBITDA, including Cape Verde, went from a 1.5 per cent loss to a EUR 4.7m profit. The cement and clinker volumes from Portugal staged a 21.5 per cent recovery to 1.08Mt, though domestic deliveries were some 12 per cent lower. As a result, some 70 per cent of the Portuguese production was exported. Turnover in the Cape Verde Islands improved by 15.5 per cent to EUR 6.4m and the cement volume there rose by 7.1 per cent to 43,000t. Cimpor's international trading and shipping activities increased turnover by 37 per cent to EUR 78.0m and the profit contribution rose by 155 per cent.

In Brazil, by far the most important country for Cimpor, the cement and clinker tonnage increased by 7.7 per cent to 3.11Mt but the turnover showed a 12.6 per cent decline to €273.5m. Rising energy costs were compensated for by synergy benefits from the enlarged business. In the period, Brazil accounted for 42.3 per cent of the group cement volume and for 40.4 per cent of the turnover. Argentina is the next most important country with a cement volume 1.5 per cent lower at 1.43Mt and a turnover 18.7 per cent down at EUR116.8m. In Paraguay, the volume rose by 45.8 per cent to 95,000t and the turnover expanded by 26.9 per cent to EUR12.2m. The total South American profit contribution declined by 20.8 per cent to EUR96.5m.

In Egypt the turnover rose by 27.2 per cent to EUR58.9m as the cement tonnage increased by 21.3 per cent to 0.99Mt, and the strength of local demand enabled prices in local currency to be raided to compensate for the higher energy costs. The South African turnover declined by 8.9 per cent to EUR24.6m though cement volumes did improve by 18.4 per cent to 0.3Mt.

Commercial policy has been adapted to better deal with competition from imports in the Durban market. In Mozambique, cement deliveries advanced by 11.7 per cent to 0.30Mt, while turnover eased by 1.2 per cent to EUR28.5m as there was an increased import penetration and electricity supply problems.