Italcementi 9M12 sales hit by Western Europe, competition in Africa

Leading Italian cement producer Italcementi posted a significant drop in nine month net profit as sales were hit by its Western European markets and higher competition in Africa.

Nine month net profit totalled EUR17.1m compared to EUR105m for the nine months to September 2011. After minorities, the company posted a loss of EUR39.7m. Revenues fell 4.4 per cent to EUR3.396bn.

Recurring EBITDA in the first nine months was EUR500.5m (-11.4% from the year earlier period, but down 8.3% if the CO2 component is excluded). After a positive net balance of EUR16.2m on non-recurring income and expense mainly generated by capital gains on the sale of its Pontassieve cement plant and of Silos Granari della Sicilia, and net of restructuring expense, EBITDA was EUR516.7m (-11.6%) while EBIT was EUR159.8m (-34.0%). At individual country level, the strongest progress in recurring EBITDA was reported in North America and Italy, while the largest decreases were in France-Belgium, Spain and Egypt.

The cement and clinker segment saw sales of 34.6Mt, down 7.3 per cent for the first nine months of 2011, reflecting the impact of the crisis in Western Europe and a reduction in sales volumes in Egypt and Morocco caused by the entry of new players. The Central Western Europe division saw a 16.8 per cent decline in cement and clinker sales to 12.2Mt while Emerging Europe, North Africa and Middle East volumes fell 4.9 per cent to 11.1Mt. North American cement and clinker volumes were stable at 3.2Mt and the Asian division saw a 7.1 per cent gain to 7.6Mt.  Cement and clinker sales showed a small overall increase in emerging counties, with significant improvements in India and Thailand. In Egypt, as the country’s political situation stabilises, the strengthening upturn in consumption could offer opportunities for improvements in group operations on the main market in the North Africa-Middle East area, the company said.

Going forward, the company said fourth quarter EBIT should be in line with 4Q11.