Cementir's 1Q24 regional market update

 Cementir's 1Q24 regional market update
13 May 2024

Cementir's results for the 1Q24 were overall in line with management's expectations despite the decline in revenues and EBITDA compared to the first quarter of the previous year. The company reported regional growth in Turkish cement sales and Belgian ready-mix sales.

Cement sales volumes increased by 22 per cent compared to the 1Q23 in the domestic market, where the most significant growth was recorded in the Elazig and Kars regions of Eastern Anatolia, supported by post-earthquake reconstruction and a mild climate, while it was lower in the Aegean region (Izmir). Revenues decreased by 2.6 per cent to EUR73.3m compared to the 1Q23 (EUR75.2m).

In the Marmara region (Trakya) volumes declined mainly due to poor weather conditions. Cement and clinker exports increased by eight per cent compared to the 1Q23. Ready-mixed concrete volumes increased by 31 per cent compared with the 1Q23. Aggregate sales also increased sharply compared to 2023 due to the opening of a new quarry in Malatya in Eastern Anatolia.

Overall, the region's EBITDA amounted to EUR9.2m, an increase of 18.7 per cent compared to the previous year (EUR7.8m), thanks to higher volumes and average sales prices of cement.

Revenues declined to EUR12.3m, a 1.7 per cent drop compared to EUR12.5m in the 1Q23, mainly due to the devaluation of the Egyptian pound. Sales volumes of white cement in the domestic market fell by approximately 16 per cent.

EBITDA decreased by 1.8 per cent to EUR3.3m (EUR 3.4m in the 1Q23), due to lower sales volumes, higher operating costs and the devaluation of the Egyptian pound against the euro, which were not offset by higher sales prices.

In the 1Q24 domestic cement sales volumes decreased by three per cent compared to 2023. Investments in the first three months of the year amounted to EUR11m, mainly related to the renovation project of kiln 4 at the Gaurain plant, which will be completed in 2024. The project will increase the use of alternative fuels from 40 per cent to more than 70 per cent, to increase production capacity and to reduce CO2 emissions per tonne of clinker by approximately six per cent.

Ready-mixed concrete sales volumes decreased by approximately 20 per cent compared to the same quarter of 2023, with a more significant decline in France. However, aggregate sales were substantially in line with the 1Q23, despite the adverse weather conditions in the first two weeks of the year and the decline in the road segment.

Revenues fell by 12.3 per cent to EUR79.4m against EUR90.6m in the same period of 2023, while EBITDA increased by two per cent to EUR21.6m (EUR21.2m the previous year). 

Norway and Sweden
In the 1Q24 sales revenues in Norway and Sweden decreased by 25 per cent to EUR30.4m (EUR40.6m in the 1Q23), while EBITDA was EUR-0.5m (positive by EUR0.7m in the same period of 2023). The reduction in EBITDA is exclusively due to the negative trend in Norway.

In Norway ready-mixed concrete sales volumes decreased by 29 per cent compared to the 1Q23 due to a slowdown in residential and commercial demand, adverse weather conditions and delays in the start of some major infrastructure projects. In February, three plants were closed.

In Sweden ready-mixed concrete volumes increased by 13 per cent compared to the previous year, while aggregates volumes decreased by 12 per cent. In Sweden, subzero temperatures and snow have also affected the activity.

In the United States, white cement sales volumes decreased by four per cent compared to the 1Q23. Overall, revenues fell by seven per cent to EUR 42.6m (EUR45.8m in the 1Q23), while EBITDA decreased by 11.8 per cent to EUR5m (EUR 5.7m in 2023), due to lower sales volumes, lower sales prices due to strong competition and higher cement purchase costs compared to the previous year. 

Sales revenues decreased by 17 per cent to EUR10.4m (EUR12.6m in the 1Q23) due to a reduction in sales volumes of about 10 per cent, a slight decrease in prices and the 6.3 per cent yuan devaluation against the average euro exchange rate in the 1Q23. EBITDA decreased by 12.9 per cent to EUR1.8m (EUR2m in the 1Q23), due to lower volumes and sales prices.

Sales revenues decreased by 10.2 per cent to EUR10.4m (EUR 11.5m in the 1Q23). Total volumes sold increased by six per cent with the domestic market declining by nine per cent, also due to the unusually high level of volumes sold in the month of February 2023, whereas exports increased compared to the 1Q23 for higher deliveries to the Philippines and Vietnam. EBITDA reached EUR1.3m, down 17.3 per cent from EUR1.6m in the 1Q23.

For 2024, the group expects to achieve consolidated revenues of approximately EUR1.8bn, EBITDA of approximately EUR385m and a net cash position of around EUR300m at the end of the period.
Planned investments are equal to approximately EUR135m (EUR104.2m in 2023), of which around EUR48m in sustainability projects. Research and development expenses are expected to remain stable compared to 2023, as is the average number of employees. 

Published under Cement News