UBS has cut Buzzi’s 2012 EBITDA projections by three per cent and now expects it to remain flat for the year at EUR424m as lower European demand weighs on the Italian cement major’s performance. The new EBITDA estimates are in line with the group‘s guidance and eight per cent lower than the consensus estimate of EUR460m.
The broker has also has cut its recommendation on Buzzi Unicem to “sell” from “neutral” saying that cement demand in Europe has deteriorated significantly.
Although Buzzi Unicem benefits from the expansion and modernisation in many attractive market areas, the company relies too much on Europe, compared with its rivals, UBS said.
In addition, UBS has cut Buzzi Unicem’s 2013-16 EBITDA estimates by some seven per cent, saying it expects volumes in Europe to remain low for a long time.
The research house expects Buzzi’s 2Q12 sales at EUR823m, EBITDA of EUR144m, up eight per cent YoY, EBIT of EUR89m and a pre-tax profit of EUR17. The improvement is due to the company’s strong performance in the USA, Ukraine, Russia and Mexico. Net debt is seen at EUR1.1bn.
