Falling profits in South America, Egypt and Portugal hit Cimpor results

Cimpor has reported a first-quarter turnover 28.7 per cent lower at EUR454.1m and EBITDA fell by 35.1 per cent to EUR80.1m. The trading profit (EBIT) dropped by 51.9 per cent to EUR35.6m. The net financial charge edged ahead by 0.7 per cent to EUR75.8m to give a pretax loss of EUR40.3m, compared with EUR1.3m a year earlier. At the net attributable level there was a loss of EUR40.7m, compared with a loss of EUR17.2m a year earlier. The net debt was 10 per cent lower at EUR3,170m, but the gearing level was in the stratosphere, given that the equity was just EUR215m.

The consolidated cement and clinker deliveries declined by 11.2 per cent to 6.03Mt, with volumes being lower in all markets apart from Mozambique, Cape Verde and South Africa. Mozambique was the only area to significant growth with a 26.3 per cent advance.

Turnover in Portugal declined by 24.1 per cent  to EUR53.8m and EBITDA, including Cape Verde, was off by 15.6 per cent to EUR8.2m. The cement and clinker volumes from Portugal dropped by 34.8 per cent to 0.73Mt. Export volumes were badly affected by a delay in the granting of import licences by Algeria, which had been an important market. Turnover in the Cape Verde Islands improved by 20.7 per cent to EUR8.2m and the cement volume there rose by 7.4 per cent to 49,000t.  Cimpor's international trading and shipping activities saw turnover drop by 45.2 per cent to EUR48.2m though the profit contribution did improve by 13 per cent to EUR2m.

In Brazil, which remains the most important country for Cimpor in terms of cement volume and turnover though no longer in terms of EBITDA, the cement and clinker tonnage declined by 17 per cent to 2.268Mt and the reduction in turnover was a more significant 45.1 per cent to EUR135.5m. A weaker economy combined political instability led to a fall in margins and EBITDA dropped by 57.9 per cent to EUR17.1m.  In the period, Brazil accounted for 37.3 per cent of the group cement volume and for 26.5 per cent of the turnover, compared with 39.1 and 33.8 per cent, respectively a year earlier. Argentina remains the next most important country with a cement volume 7.1 per cent lower at 1.41Mt and a turnover 20.5 per cent down at EUR133.8m. In Paraguay the cement volume declined by nine per cent to 90,000t and the turnover fell by 25.9 per cent to EUR10.5m. The total South American profit contribution declined by 38.6 per cent to EUR52.2m.

In Egypt the turnover declined by 13.3 per cent to EUR52.6m though the cement tonnage fell by just 2.3 per cent to 0.85Mt as competitive pressures increased. The South African turnover declined by 22.3 per cent to EUR23.2m as cement volumes were 2.8 per cent ahead at 0.32Mt. EBITDA was negatively affected higher raw material and maintenance costs as well as the drop in the exchange rate. In Mozambique cement deliveries rose by 26.3 per cent to 0.37Mt, as imports lost market share as electricity supplies became more reliable, but the turnover improved by just 4.4 per cent to EUR34.1m while prices rose and EBITDA was more or less doubled.