Buzzi Unicem 2005 net profit jumps

Buzzi Unicem 2005 net profit jumps
31 March 2006

Italian cement and construction firm Buzzi Unicem posted a 46 per cent increase in 2005 net income to Euro 255.6m, helped by growing cement sales, it said in a statement on Thursday.  The group, whose operations span Italy, the United States, Mexico and Russia, said it proposed a dividend of Euro 0.32 per ordinary share and Euro 0.344 per savings share.  Group revenues rose 6.5 per cent to Euro 2.95bn. Earnings before interest, tax, depreciation and amortisation came in at Euro 801m.

Cement volumes totalled 32.2Mt, +1.0 per cent over 2004. On the rise are the United States, Mexico, Russia and Ukraine while volumes are down in Germany, Poland and, to a lesser extent, Italy. Ready-mix concrete sales at 15.6 million cubic meters are up 2.7 per cent, thanks to the United States and Czech Republic contribution. A decrease was recorded in Italy and Germany. 

In Russia, the Suchoi Log cement plant, running close to capacity, might face constraints in meeting a fast growing demand. In Ukraine, the hike in production costs due to gas price increase could be partly recovered through better pricing. In the Czech Republic and in Poland prospects are bright for the construction industry. Since production costs are on the rise, the good margin level attained in 2005 can be confirmed only  if selling prices show a favourable development. 

In the United States volumes are expected to slightly rise, while unit revenues improvement will be partly absorbed by the increase in production costs. Operating results in dollars should remain at a very positive level also in 2006.  In Mexico cement consumption is expected to grow. The coming on stream of the second production line at Cerritos should allow Corporación Moctezuma to further increase sales; assuming prices remain at least stable in real terms, the operations enhancement will positively reflect on operating results.
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