Turkey’s cement firms 2006 profit margin rises, cautious on 2008 outlook

The average profit margin of the 14 listed Turkish cement makers increased to 28 per cent in 2006, as sales rose and production costs fell, but the sector might face lower profits in 2008 due to excess production, Referans daily reported on March 28, 2007.

Cement companies focused on selling on the domestic market to cash in on an upswing of the construction market in 2006. To meet the higher local demand in the last two years, producers invested in new capacities, which are expected to lead to an excess production in 2008.

Cement sales in Turkey reached 43Mtin 2006, up from 35Mt.

The combined profit of the 14 listed cement producers in 2006 rose by 40.7 per cent on the year to 1.139bn lira (US$820m/€614m).

Adana Cimento registered the highest increase in its profit margin to 53.1 per cent in 2006 from 36.76 pct in the previous year. Second came Bolu Cimento, which raised its profit margin to 45 per cent from 30 pct. Bolu Cimento, on the other hand, was the cement producer that raised its profit most in 2006, reporting an annual rise of 108 per cent to 87.6m lira (US$63m/€47m).