Cimpor - November 2013

Cimpor's nine-month turnover emerged 23.4 per cent higher as the additional assets in Argentina, Brazil and elsewhere more than made up for the assets sold, predominantly in the Mediterranean rim. The EUR1984.3m turnover was 69.5 per cent higher than the EUR1170.6m shown for the first nine months of last year. The EBITDA improved by 14.2 per cent to EUR481.5m on a comparable basis and 35.5 per cent higher than the EUR355.4m shown a year ago. There has been no income from the sale of emission permits in Europe, compared with a EUR24m benefit a year ago. South America generated 79.5 per cent of the EBITDA in the nine months. Based to the current structure, the underlying trading profit (EBIT) went from a EUR20.6m loss to a positive EUR349m, while a year ago a EUR247.3m profit was shown. Net financial charges jumped by 158.5 per cent to EUR290.8m, to give a pretax profit of EUR58.3m. The tax charge was 79.7 per cent higher at EUR62.7m. The net attributable loss was EUR5.6m, compared with a pro-forma loss of EUR167.9m for the first nine months of 2012. Net debt at the end of September stood at EUR3605m, giving a gearing level of 3.23 times shareholders' funds. Capital expenditure in the period more than doubled (+105.8 per cent) to EUR288.7m.

Group cement and clinker shipments amounted to 20.97Mt, 11.5 per cent higher than the 18.82Mt shown a year ago. The continuing business was 1.1 per cent ahead at 11.13Mt, while the operations contributed by InterCement sold 9.85Mt, compared with the 7.81Mt lost year from the divested operations.

The Portuguese and Cape Verde islands turnover declined by 13.1 per cent to EUR234.7m as cement and clinker sales increased by 9.9 per cent to 3.22Mt, but with again lower domestic deliveries and higher, lower margin, exports, profitability suffered. The area represents 30.2 per cent of depreciation but just 0.7 per cent of capital expenditure. Some 60 per cent of the group's Portuguese cement and clinker shipments were exported. Portugal's share of the group's cement volume was 15.4 per cent compared with 15.6 per cent a year ago.

Brazil, already the largest contributor to cement volume, turnover and profit, further increased its relative importance thanks to the inclusion of the assets contributed by InterCement. As a result, cement output in Brazil more than doubled, rising by 111.4 per cent from 4.42Mt to 9.34Mt, or 44.5 per cent of the group total. Turnover in Brazil rose by 78.4 per cent to EUR942.6m, in spite of a 13.4 per cent currency devaluation, and the Brazilian capital expenditure more than trebled to EUR208m, or 72.1 per cent of the group total. The Brazilian capital expenditure amounted to almost four times the depreciation.

Argentina, which also includes Paraguay, is the second largest source of turnover, contributing EUR487m, or 24.5 per cent of the group total. Cement shipments amounted to 4.9Mt in the period and the group subsidiary Loma Negra is the Argentinean market leader. Cement demand in Argentina achieved its second-consecutive monthly all-time monthly record in the third quarter of 2013. Cimpor started grinding operations in Paraguay towards the end of October. 

Egypt is now the fourth biggest contributor to in terms of both cement volume and turnover. The Egyptian turnover, however, declined by 3.2 per cent to EUR133.3m, not helped by a 16 per cent fall in the value of the pound against the euro. The group's Egyptian cement deliveries eased by 1.2 per cent to 2.35Mt.

South African cement deliveries recovered and rose by 18.5 per cent 0.95Mt, helped by an increased penetration of the ready-mixed concrete market, but the turnover declined by 8.3 per cent to EUR95.5m as the rand fell by 20.9 per cent against the euro. In Mozambique, cement volumes improved by a further 2.5 per cent to 0.88Mt and the turnover was up by 6.1 per cent to EUR103.3m. The commissioning of a new mill in the Maputo region helped, but competitive pressures increased and deliveries of limestone were irregular. The EBITDA from southern Africa improved.

Cimpor's Argentinean subsidiary Loma Negra is to start the construction of a new 2000tpd integrated cement works in the San Juan province in 2014. The envisaged construction period is 30 months. At present, Loma Negra operates eight cement works, including one other in San Juan, with a combined capacity of 8.7Mta.