Cimpor first-quarter boosted by new profile

Cimpor has reported a 22 per cent rise in turnover and a 15.2 per cent YoY increase in EBITDA for the first quarter of 2013 mainly due to the reshuffling of the group's profile. The performance of the new set of assets recently brought in by InterCement resulted in a contribution to consolidated EBITDA that was four times higher than that of the assets handed over by Cimpor in the asset swap concluded at the end of 2012.

"The inclusion of operations in new countries such as Argentina and Paraguay, expanded geographic distribution in Brazil, commercial performance in Mozambique and an increase in the Trading activity were positive notes," Cimpor said in a statement. On the other hand, the difficult economic climate in its domestic market of Portugal, increased fuel costs in Egypt and competition from imports in South Africa held back results from an even better performance, the Portuguese cement major noted.

Turnover in the first quarter totalled EUR635.9m compared to the EUR521.2m posted in the same period of 2012. A drop in sales in the Portuguese market and a rise in the amount of exports, for which prices are lower than domestically, and a slowing of business in Cape Verde were the main reasons for a drop in turnover in these countries. In Egypt a rise in sales led to a three per cent increase in turnover against 2012. Egypt, South Africa and Mozambique were affected by exchange rates. However, a sales increase in Mozambique made it possible for revenues to rise by 13.2 per cent.  There was a notable rise of 76.9 per cent in Brazil as a result of incorporation of assets taken on via the asset swap carried out with InterCement.

In consolidated terms Cimpor’s EBITDA for the first quarter of 2013 totalled EUR147.4m, which was a rise of 15.2 per cent against the same period of 2012. The EBITDA margin fell back to 23.2 per cent, which was 1.4pp  less than in 2012, essentially as a result of restructuring costs in Portugal.The contribution from assets that remained with Cimpor following the swap totalled EUR79.4m, which was a drop of 29.1 per cent against 2012, essentially affected by performance in Portugal and South Africa.

Net Income, attributable to Shareholders, totalled EUR52.4m, which was a rise of seven per cent on the year-ago period.

Expansion of the group’s business led to a 5.9 per cent increase in total cement and clinker sales against the first quarter of 2012, with a total of 6.4Mt sold in the period. Despite operations that remained with Cimpor suffering a 4.6 per cent drop in sales, the new units in Brazil, Argentina and Paraguay outperformed the sales of swapped assets by 20.8 per cent.

The inclusion of assets acquired from InterCement led to sales in Brazil doubling and ensured sales of around 1.5Mt in Argentina and Paraguay. In Paraguay, where the production unit is still under construction, sales were based on imported cement, mainly from Portugal. Egypt managed to increase its sales by 2.9 per cent overcoming difficulties with fuel supply, whilst Mozambique continued on the growth trajectory of cement consumption, with Cimpor selling 23.4 per cent more in 2013 than in the same period of 2012.

In Portugal, the domestic market saw significant retraction once again by falling back around 40 per cent in the first quarter. Despite this Cimpor managed to outperform the market, which along with a rise of 42.2 per cent in exports (essentially for new countries in Africa and South America) limited the overall drop in sales to just 6.6 per cent. In Cape Verde the adverse economic climate was reflected in cement consumption and the company’s sales fell by over 25 per cent in the first three months of the year. In South Africa competition from imports in the Durban area, where Cimpor is focused, and market stagnation led to a drop in sales of 8.4 per cent against the first quarter of the previous year.