Titan boosted by its US operations

Titan boosted by its US operations
28 November 2005

Titan’s turnover for the first nine months rose by 16.2% to EUR 994.79m, with the operating profit at the EBITDA level rising a little more slowly by 13.6% to EUR 284.9m.  The slower rate of profit growth reflects the inability to fully pass on higher energy costs in some markets and higher transport and integration costs. Group shipments of cementitious products rose by some 9% to 11.5Mt, while ready-mixed concrete deliveries were ahead by around 8% to 4.1Mm³. 
Greek domestic cement deliveries turned positive in the third quarter, registering a 1% improvement, after falls of 4% in the second quarter and of 19% in the first quarter, giving a 7% decline for the year to date.  This suggests that the full year decline will be less than had been expected earlier in the year.  The spring cement price increase did to fully cover the higher fuel costs, with the next price increase anticipated in March of next year. The downstream operations contributed less and there were integration costs charged against three smaller ready-mixed concrete acquisitions that should add around 0.15m m³ in a full year.  The group’s Greek turnover was off by 5.1% to €387.9m, while the EBITDA fell by 15.2% to EUR 142.3m. The impact of the forthcoming introduction of value added tax on residential construction, the biggest determinant of Greek cement demand, remains unclear but will apply to building permits issued from next January.  However, such permits remain valid for several years, suggesting a limited initial effect.
The south-eastern European markets outside Greece produced a turnover of €120.3m, an increase of 27.8%, while the EBITDA was off by 1.0% at EUR 39.0m.  Cement shipments in Bulgaria grew strongly and the company had to import both cement and clinker in order to satisfy customer demand.  In spite of the strength in demand price increases to date have been modest, but the management is hopeful to be able to raise prices by more in 2006.  A 50% increase in capacity at the Zlatna works should be fully on stream in 2007.  Cement deliveries in Serbia have been broadly static and a good-will impairment provision has been charged against profits there.  Macedonian cement volumes, on the other hand, are showing some improvement. 
In the Unites States a 41.9% increase in turnover to US$561.8m translates into a 38.0% advance to EUR 38.0m.  Helped by price increases ahead of the rise in costs, the EBITDA jumped by 93.0% to EUR 105m.  Florida was particularly strong, though some slowing down had become evident from late October in the wake of the hurricane Wilma that caused a lot of disruption in the area. The group’s plants were largely unaffected, other than by short term electricity supply problems that caused some loss of production.  This year’s second cement price in July across Titan’s US operations is holding well and a further price increase, ranging from, US$5 to US$7/st, has been announced from next January.

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