Titan Group sees 6% revenue increase in 1Q20
Based on robust US demand and resilience of markets in the eastern Mediterranean, Titan Group's consolidated revenue increased in the 1Q20 by 6.1 per cent, reaching EUR384.8m, despite the slowdown of business due to COVID-19 since mid-March.
EBITDA declined by EUR3.7m, or 8.5 per cent YoY, reaching EUR40.6m, mainly due to the advanced costs of about EUR10m associated with the earlier timing of the plant maintenance in Florida (completed in 2Q19).
Preliminary April year-to-date financials show that total revenue comes flat compared to 2019 at EUR508m while EBITDA reached EUR67.2m, up by EUR5.7m or 9.3 per cent.
The group recorded a 1Q20 net loss of -EUR15.8m, after taxes and minority interests, compared to a loss of -EUR6.2m in the 1Q19. This year's decline was caused by EUR9m of one-off mark to market losses on fixed US dollar interest rate hedges, reported Titan Group.
Group cement sales increased by four per cent YoY, supported by higher demand across most markets. Aggregates sales increased by three per cent and ready-mix sales increased by two per cent when compared with the equivalent period in the previous year.
Regional highlights
Revenue in the USA increased by 6.2 per cent in the 1Q20 to EUR237.8m. EBITDA decreased by EUR13.6m, or 32.9 per cent, to EUR27.2m, affected by the cost of the planned annual stoppage to the plant in Florida in March 2020.
Greece and western Europe revenues increased by 2.4 per cent to EUR57.5m. EBITDA turned positive to EUR1.4m from a EUR0.8m loss in the 1Q19. Export sales rose and benefitted from the strengthening of the US dollar.
Southeastern Europe saw a one per cent fall in revenues to EUR47.9m. EBITDA rose to EUR12m from EUR9.2m in the 1Q19.
Volumes in Egypt rose by five per cent, and Turkey had growth in domestic sales and exports. Total revenues in the eastern Mediterranean reached EUR41.5m, up 21.3 per cent. EBITDA was a EUR-0.4m loss versus EUR-5.2m loss in the 1Q19.
Titan also reported that its Brazilian subsidiary, Cementi Apodi, posted growth in the 1Q20, on the back of an expanding market in the northeast of the country.
Group net debt at 31 March 2020 closed at EUR878m. Capex spending in the 1Q20 reached EUR20.8m, down from EUR22.6m in the 1Q19.
Outlook
Titan is looking to the long term and recognises that it is currently in unchartered territory with the COVID-19 pandemic having forced more than 35 per cent of its total employees to switch to remote working. However, cement consumption is rising as lockdown measures are lifted.
Titan estimates cement markets in Florida and the Mid-Atlantic have fallen by 10 per cent in the past six weeks, as well as Turkey, rising to a 30-40 per cent market decline in southeast Europe and New York. Greece is somewhere in between, while Egypt has seen growth despite the adversities.
The company expects products to see a fall in demand, but the depth and duration of the decline cannot be assessed currently. In particular, demand for housing will likely be held back by declining confidence and rising unemployment. Similarly, commercial projects risk being postponed or cancelled.
