Cementir announces 13% EBITDA rise in 2018

Cementir announces 13% EBITDA rise in 2018
09 March 2018

Cementir reported a 10.9 per cent increase in revenues to EUR1.14bn in 2017 from 1.028bn in 2016. EBITDA advanced by 12.6 per cent to EUR222.7m while net profit edged up 6.2 per cent to EUR71.5m from EUR67.3m. The figures do not include the Cementir Italia Group (discontinued operations), but do include Compagnie des Ciments Belges SA (CCB), which Cementir acquired on 25 October 2016.

The company's net financial debt decreased from EUR562.4m to EUR536.6m. Employees reached 3021.

"The year 2017 ended with EBITDA of EUR222.7m, an increase on the EUR197.8m of the previous year, thanks to the 12-month consolidation of the CCB Group and the improvement in China, United Kingdom, Norway and Sweden, which substantially offset the lower earnings in Turkey, Egypt and Malaysia. Also, the depreciation of the Turkish lira and the Egyptian pound had a negative impact on Group results.

"The cash flow generated by operations and control of working capital allowed the Group to end the year with net financial debt of EUR 536.6 million, which was better than forecast," commented Cementir's Chairman and CEO, Francesco Caltagirone Jr.

Sales volumes
In terms of sales volumes, the Italy-based cement producer sold some 10,282,000t of grey and white cement as well as 4,948,000m3 of ready-mixed concrete and 9,335,000t of aggregates in 2017. Cement and clinker sales volumes benefitted from the change in consolidation in Belgium as well as good performance in Denmark, Turkey, Egypt and Malaysia. Ready-mix volumes saw a 11.9 per cent YoY rise due to acquisitions in 2016 and strong sales in Denmark,Norway and Sweden, despite the fall in sales in Turkey. Aggregates volumes more than doubled as CCB contributed to the figure and Sweden and Denmark delivered a robust performance.

Nordic/Baltic and USA market
The Nordic/Baltic and USA markets saw a 41.4 per cent YoY rise in revenues, helped by CCB’s consolidation, while sales revenues improved 14 per cent in Norway and Sweden with EBITDA increasing by 7.9 per cent. In Denmark, sales grew at a more modest rate and EBITDA fell by 16.7 per cent.

Eastern Mediterranean
Revenues in the eastern Mediterranean fell by 11.8 per cent YoY to EUR229.6m, impacted by the devaluation of the Turkish lira agains the euro which was not entirely offset by rising domestic sales and prices. A similar narrative played out in Egypt where currency devaluation against the euro also impacted results despite higher cement sales volumes and local prices.

Central Mediterranean
Revenue from sales totalled EUR183.4m and included the revenue of Cementir Sacci of EUR70.1m. Cement sales volumes increased 35.5 per cent compared to 2016 as a result of the 12-month consolidation of Cementir Sacci SpA but fell 9.6 per cent on like-for-like basis, with average prices rising.  EBITDA was negative EUR5m million but improved from a loss of EUR12.1m the previous year and includes EBITDA of Cementir Sacci of EUR-2.5m.

Revenues in the Asia-Pacific edged up by 2.6 per cent as China delivered a positive performance with a 5.6 per cent increase in revenues to to EUR44.1m although in local currency the hike was nine per cent. Malaysia and Australia delivered more modest performances, particularly in the domestic markets. Cement exports increased by around five per cent YoY, mainly due to higher volumes to Vietnam, Australia, Philippines and Japan.

Outlook for 2018
Looking ahead, Cementir forecasts a consolidated revenue of EUR1.25bn and EBITDA of around EUR235m in 2018. The figures include Lehigh White Cement Co (LWCC), which the group will continue the integration of.

Net financial debt is expected to continue to fall to EUR260m by 31 December 2018, after a capital expenditure of around EUR80m, the payment of US$106.6m for LWCC and the collection of the payment for the 100 per cent of share capital of Cementir Italia Spa.

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