Cementir's 1Q16 revenue falls 1.1% to EUR218.9m

Cementir has announced that its results for the 1Q16, despite being lower than the previous year, are in line with management expectations and show a strong performance of operations in the Scandinavian countries, Malaysia and Egypt, which more than offset the lower earnings in Turkey and the difficulties encountered in Italy and China. The performance for the quarter was adversely impacted by the seasonal effect of the earlier Easter holidays with respect to the previous year, says Cementir. 

Total operating revenue was down 1.1 per cent at EUR218.9m compared to EUR221.3m for the 1Q15, reflecting the decrease in the stock of semi-finished products and finished goods. Operating costs, amounting to EUR197.6m, were essentially unchanged on the1Q15. However, at constant exchange rates, operating costs would have amounted to EUR209.1m, up EUR 11.9m on the previous year, with EUR11.5m attributable to the positive exchange rate effect of the depreciation of the main foreign currencies against the euro.

Revenue from sales for the 1Q16 increased by 2.8 per cent compared to 2015, as a result of the strong performance in all the main geographical areas of operations, except for Italy and China. At constant exchange rates, revenue from sales would have amounted to EUR223.4m, up 9.1 per cent on the previous year.

Specifically, in the Scandinavian countries revenue increased by EUR1.6m (+1.6 per cent) compared to the 1Q15, thanks to the positive performance of cement sales in Denmark, which offset the decline in ready-mixed concrete sales volumes. The construction industry began the year intensively with strong activity in civil works projects, favouring the 11.2 per cent increase in cement sales, despite the harsh winter, with average sales prices almost unchanged compared to the first quarter last year.

In contrast, ready-mixed concrete sales declined by 3.4 per cent compared to the same period of 2015. Danish sales were down -9.7 per cent, due to the completion of several infrastructure projects, and a rise both in Norway (+2.8 per cent), where the market showed signs of growth compared to the previous year, and Sweden, where the intensive construction activity in the Malmö area generated an 11.4 per cent increase in sales volumes.

The average price of ready-mixed concrete in local currency remained stable in these geographical areas compared to the 1Q15.

In Turkey revenue from sales in local currency was up 15 per cent on the first quarter 2015, as a result of the increase in demand in the Izmir and Edirne areas, which generated a significant increase in sales volumes of cement and ready-mixed concrete (+8.1 per cent and +39.4 per cent compared to 31 March 2015), while average sales prices in local currency were slightly down on the average for the same period of 2015.

In Egypt sales volumes for cement and clinker were up 11.5 per cent on 31 March 2015, mainly due to the recovery in domestic demand, with a slight drop in sales prices in local currency.

In Malaysia after having increased production capacity, revenue from sales was up around 75 per cent compared to 1Q15, as a result of the doubling of sales volumes of white cement and clinker, mainly due to exports to Australia.

In China, however, revenue in local currency fell by around nine per cent compared to the 1Q15, with the increase in sales volumes of white cement on the domestic market having been offset by the fall in export volumes.

Finally, in Italy, revenue from sales was around eight per cent lower than at 31 March 2015 due to a fall in sales volumes of cement (-11 per cent) accompanied by a slight rise in sales prices.