Buzzi Unicem 1Q14 cement sales rise by 15%

Buzzi Unicem 1Q14 cement sales rise by 15%
09 May 2014

Buzzi Unicem has announced that in the first quarter 2014, cement and ready-mix concrete demand increased in all geographical areas of group operations compared to the same period a year earlier. Domestic deliveries in Italy were still difficult, but some progress was made in sales of clinker.

Cement sales by the group at 4.8Mt in 1Q14 were up 15.2 per cent from 1Q13. Volumes showed robust growth especially in Central Europe. Ready-mix concrete volumes had an even more marked progress and totalled 2.5Mm3, up 19.9 per cent from the same period in 2013. The price effect in local currency was positive compared with 1Q13 in the USA, Poland, Russia and Luxembourg. Conversely, net unit revenues, always in local currency, were lower in Italy, mainly as a consequence of a different mix and showed slight decreases in Germany, the Czech Republic and Ukraine.

Italy and Central Europe
Buzzi Unicem sales of hydraulic binders and clinker, exports included, progressed by 15.2 per cent from 1Q13 when the pace of deliveries was quite depressed. Selling prices decreased by 8.4 per cent QoQ, reflecting the different mix of products sold, ie higher sales of semi-finished clinker, and the negative trend occurred during the previous year. In the ready-mix concrete sector output rose by 11.5 per cent with prices down by 8.9 per cent. Overall, net sales came in at EUR86.6m, up 4.3 per cent from EUR83m while EBITDA closed in negative territory for EUR8.9m versus a negative figure of EUR10.1m in 1Q13.

A mild climate in Europe favoured deliveries. In Germany, the company achieved a growth of 32.6 per cent in cement sales and 42.9 per cent in ready-mix concrete volumes in the 1Q14. Cement selling prices were virtually stable (-0.7 per cent) while ready-mix concrete prices slightly increased (+0.7 per cent). Overall net sales stood at EUR127.8m versus EUR94.5m in 1Q13. In Luxembourg cement and clinker volumes reported a sizeable increase (+26.7 per cent). In the Netherlands, ready-mix concrete volumes sold in the first three months were up 5.9 per cent.

Eastern Europe
In the Czech Republic, cement sales volumes increased by 27.1 per cent and average prices in local currency were slightly down (-1.2 per cent). The ready-mix concrete sector, which also includes the Slovakia operations, opened the year with strong volume growth (+52.5 per cent). In Poland, cement deliveries reported a 57.3 per cent increase, along with a sizeable improvement of ready-mix concrete output (+34.1 per cent).

In Ukraine, the first three months cement sales volumes advanced by 21.3 per cent in an environment of declining prices (-1.5 per cent in local currency). Net sales at EUR16.9m, were up 9.4 per cent from EUR15.4m in 2013. In Russia, cement sales remained at the same level as in the previous period (+0.4 per cent) with strengthened average selling prices (+1.9 per cent).

Despite a challenging comparison with the positive results of 1Q13 and the harsh temperatures which hampered building activities, cement sales increased by 3.1 per cent with average selling prices in local currency higher by four per cent. Ready-mix concrete output closed the quarter down by 5.8 per cent but with prices showing clear improvement. Overall net sales came in at EUR152.5m from EUR148.8m in 2013 (+2.5 per cent). Compared with 1Q13, the result was negatively influenced by a higher concentration of maintenance programmes and the destocking of clinker.

The first part of 2014 confirmed the turnabout occurred in the 4Q13, showing a satisfactory rate of improvement in cement sales. Ready-mix concrete sales decreased by a few percentage points.

Group consolidated net sales improved by 11.6 per cent from EUR444.9m to EUR496.4m, gross of a foreign exchange effect which unfavourably accounted for EUR18.1m. EBITDA closed at EUR10.3m, up EUR18.7m from 1Q13.

Cash flow for the period was negative by EUR5.8m (negative by EUR16.8m at March 2013). Net debt as at 31 March 2014 amounted to EUR1170.6m, up EUR73.4m over year-end 2013. Capital expenditures accounted for a total of EUR38.7m (EUR37.7m in 1Q13 ), EUR6m of which was allocated to special projects.

In Central Europe and in most Eastern European markets, 1Q14 experienced a mild climate which enhanced construction activity. Moreover, the general economic environment is showing a gradual recovery. As for the Italian market Buzzi Unicem expects ongoing operational improvments to bring some benefits, while the sector’s external environment (volumes, prices, production structure) remains troubled. Operating trends in the USA have shown a progressive improvement from March onwards, after the first two months were impacted by bad weather. The unforeseeable developments of the political conflict between Ukraine and Russia, however, point to growing uncertainties and less favourable prospects in these markets.

Published under Cement News