Titan completes Pennsuco enlargement early
Titan’s first half turnover increased by 7.9% to €5261.7m, which represents a 12.4% advance at constant exchange rates. The operating profit at the EBITDA level rose by 19.5% to €144.2m, which represents a 22.3% improvement excluding exchange rate movements, while the pre-tax profit advanced by 56.2% to €101.7m. Group shipments of cement and clinker rose by around 9% to 6.7m tonnes and the aggregates volume rose by a similar percentage to 10.7m tonnes. Deliveries of ready-mixed concrete, however, were only some 4% higher at 2.5m mm3, partially reflecting cement shortages in Florida.
The Greek turnover rose by 11.3% to €268.1m while the EBITDA advanced by 15.1% to €91.6m, in spite of higher kiln fuel costs. Benefits were seen from the modernised cement works in Salonica and from the last preparations for the Olympic Games. As supplies of ready-mixed concrete to these projects were finished, cement demand in Attica fell back, but continued to grow in other parts of the country, notably in the north. While overall domestic deliveries were off by around 6%, export shipments increased again, though higher freight rated increased the pressure on margins.
The restructuring of the businesses in Bulgaria and Macedonia became effective on the 5th of May, and Bulgaria, where Titan’s capacity has virtually doubled, showed strong growth, which looks set to continue. Cement deliveries in Macedonia and Serbia were also ahead, in part thanks to a milder start to the year, but the outlook here is more uncertain and costs in Macedonia were negatively influenced by repairs to the Usje works. The Balkan division showed organic sales growth of 10.5% to take turnover to €49.1m but a €0.8m improvement in the EBITDA to €17.3m was all down to changes in the sphere of consolidation because of the additional costs incurred at Usje.
A 10.0% fall in the value of the dollar negated most of the 11.9% organic growth to leave turnover just 1.9% ahead at €209.6m, but at the EBITDA level a 30.6% underlying improvement still produced n 18.8% advance to €30.3m. The cement shortage in Florida led to customers being put on allocation for most of the second quarter, which notably affected Titan’s downstream operations in the state. However, upgraded Pennsuco plant came on stream in June, two months ahead of the original plan, allowing increased deliveries into this area of shortage and the benefits should be felt in the second half. The Mid-Atlantic market has also been strong on the back of increased demand. Following spring price increases of US$4 to US$5, prices per short ton are now around US$75 in Florida and approximately US$68 in the areas served by the Roanoke works in Virginia. A second round of cement price increases has been announced and is currently in the course of implemented, but cost are also up, notably for coal and freight costs for imported cement.
The equity accounted joint venture with Lafarge in Egypt increased turnover by around one-third to €18.7m in spite of negative currency movements, thanks to a sharp increase in domestic cement price, which just over doubled from last’s year’s nadir of US$17, and higher exports. Overall cement shipments were 4% higher, though domestic deliveries fell, and the EBITDA jumped by some 80% to €9.1m.
