Titan’s Greek profits fall by 60%
Titan’s turnover declined by 19.2% last year to €1091.4m and the EBITDA fell by 23% to €242.7m. The net financial charge rose by 5.9% to €66.3m, and after €18.7m of impairment charges and €11.9m of foreign exchange losses, the pre-tax profit dropped by 71% to €37.7m. The pre-tax figure had, however been boosted by a €20.5m gain on the sale of emission rights in Greece and Bulgaria, compared with a €9.9m gain in the previous year. The net attributable profit dropped by 89.3% at €11.0m. For the first time in 58 years, no dividend is being paid. Capital expenditure was reduced by a further 31.8% to €58m, having been reduced by 48.8% in the previous year, and the net debt at the end of December was 8.9% lower at €708m, giving a gearing level of 41.6% compared with 45.4% year earlier.
Group sales of cementitious materials were negatively influenced by the additional capacities in Egypt and notably lower demand in Libya and in Greece and the cementitious tonnage declined by 12.1% to 15.3Mt. Sales of aggregates, mainly influenced by the United States and Greece, declined by a further 16.2% to 10.9Mt, while ready-mixed deliveries were down by 8.0% to 3.66Mm³.
Greek cement consumption continued to fall and is set to decline further in 2012 to probably no more than a quarter of the peak level seen in 2006. Exports were badly hit by the elimination of exports to North Africa, though alternative markets have been found for 2012. West Africa was the largest export market in 2011. Titan’s Greek and Western European turnover fell by 38.5% to €268.7m and the EBITDA dropped 59.7% to €35m, with possibly around half of that coming from the sale of emission rights. Because of the drop in cement and clinker volumes, proceeds from the sale of emission rights more than doubled. With Greek public sector orders having virtually ceased because of the lack of money, pricing pressures are being seen in cement, aggregates and concrete.
Turnover in South Eastern Europe suffered from weaker currencies against the euro, but did improve by 2.1% to €241.2m but the EBITDA declined by 1.3% to €85.6m. Average cement sales in the region improved by about 4%, but average cement prices were lower than in the previous year and the cost of fuel was higher. In Bulgaria, the proceeds from the sale of emission rights are being used to finance investments in alternative fuels. Surplus capacity is putting pressure on prices, but demand is expected to improve during 2012 and the new 1.5Mt per annum Albanian works provides a lower cash cost base.
The US turnover eased by a further 4.2%, a much lower rate of decline than in recent years, to €303.7m, but a €5.7m loss was incurred at the EBITDA level compared with a €3.6m profit. Cement demand now seems to have stabilised in all of Titan’s US markets and is recovering in some of them, eg Virginia and North Carolina. Prices, however, remain weak, but price increases have been introduced both by Titan and by its competitors. A modest improvement in volumes is expected in 2012, which ought to be enough to make prices stick in both cement and aggregates and not to drift further. Separation Technologies continues grow profitably and turnover rose by 19% in 2011.
The Eastern Mediterranean turnover fell by 22.8% to €277.8m, but the EBITDA was off by just 7.4% to €127.79m, and the region remains the largest profit earner in the group, accounting for more than half of the total. The Egyptian market has suffered from the coming on stream of 5Mt off new capacity, while overall demand declined by 2% and the group’s turnover declined by about 9%, but the results were boosted by a €26m legal settlement against the government. Egyptian cement prices have recovered somewhat since the low point in the final quarter of last year. The Turkish cement joint venture saw double-digit sales growth, which even accelerated during the second half and cement prices continue to advance. Growth in the Turkish cement market is expected to continue in 2012, albeit at a more modest pace.
