Buzzi Unicem FY16 preliminary results
Buzzi Unicem announced that its 2016 deliveries of products showed a favourable variance in central Europe, thanks to the upturn in shipments from the spring season, and overall also in eastern Europe, with improvements in Poland, the Czech Republic and Ukraine, which more than offset the marginal decline in Russia.
Some weakness in demand during the 2H16 resulted in a moderate decrease in full-year sales in the United States of America and in a more marked rise in Italy, where no signs of awakening of consumption appeared.
Group cement sales stood at 25.6Mt, +up 0.3 per cent compared to 2015. Ready-mix concrete output, equal to 11.9Mm3, was also in line with the previous year.
In Italy domestic cement consumption, estimated at about 18.7Mta, closed with a further negative variance (-4.7 per cent over the previous year), this being the 10th consecutive year of lower domestic demand (-60 per cent from the record high of 2006). Cement and clinker volumes were down 6.2 per cent, penalised by a clear reduction in exports. Sales prices did not change significantly in the YoY comparison.
Cement deliveries in Germany, thanks to the more robust pace of the second half-year, closed with an increase of 3.4 per cent and were characterised by basically weak average prices.
In Poland cement volumes accelerated in the second half of the year, marking a strong favourable variance (+11.9 per cent), but average prices in local currency were lower compared with the previous year.
In Czech Republic cement volumes sold exceeded by 4.4 per cent the good figures achieved in the previous year, with average prices in local currency marginally down.
Meanwhile, US cement sales, after the brilliant start to the year and the clear decline during the summer months, confirmed a slight decrease (-1.7 per cent) for the full year, with more pronounced weakness of demand in Texas, particularly in the Houston area, where the economy is strongly influenced by the trend in oil prices.
In Mexico cement sales of the associate Corporación Moctezuma slightly exceeded the very high volumes achieved in the previous year, with robustly strengthened average prices in local currency. In November the second line of the Apazapan (Veracruz) cement plant, which doubled its capacity from 1.3 to 2.6Mta, came into operation.
Consolidated net sales increased by 0.3 per cent, from EUR2662 to EUR2669m. Net debt as at 31 December 2016 amounted to EUR942m, down EUR88m on EUR1030m at year-end 2015. The improvement of the net financial position was achieved thanks to cash flow from operations, after allocating EUR75m for the renovation of the Maryneal cement plant, in Texas.
Based on the preliminary information available, Buzzi Unicem expects that the consolidated financial statements for 2016 will close with a recurring EBITDA figure of approximately EUR550m, therefore more favourable than the forecast already disclosed to the market on the occasion of the interim report for the first nine months.
