Titan's European profitability suffers
Titan's first-half turnover improved by 4.4 per cent to €571.9m but the EBITDA fell by 17.8 per cent to €92.2m as European profitability continues to suffer. The trading profit fell by 36.6 per cent to €32m, but the net financial charge, that had dropped by 54.9 per cent to €20.5m a year ago, more than doubled to €44m. As a result, there was a pre-tax loss of €12.4m compared with a profit of €29.5m and the net attributable loss amounted to €21.8m.
Capital investment recovered by 5.7 per cent to €18.7m, after several years of cutting and is currently at just under one-third of depreciation. Net debt at the end of June was 8.4 per cent lower than a year earlier at €586m, giving a gearing level of 39.4 per cent.
Group deliveries of cementitious materials rose nine per cent to 8.5Mt and aggregates shipments advanced by some 15 per cent to 5.9Mt, but ready-mixed concrete deliveries declined by 1.2 per cent to 1.64Mm³. Exports of cement and clinker are predominantly from Greece and Albania.
Greek and Western European turnover recovered by 2.4 per cent to €121.7m, but the EBITDA continued to fall, dropping by 67.8 per cent to €9.1m and not helped by the absence of carbon credits. Greek domestic deliveries have continued to decline and are now at an unsustainably low level, but good export volumes have kept capacity utilisation at in excess of 60 per cent. The very low level of domestic demand keeps cement prices under pressure and has also depressed downstream activities. West Africa, North Africa and the USA provide important export markets. In Greece, bad debt provisions now cover some 27 per cent of trade receivables compared with 29 per cent a year ago.
The South Eastern European turnover declined by a further 2.3 per cent to €99.1m and the EBITDA fell by another 25.4 per cent to €23.2m, partially reflecting the absence of carbon credits in Bulgaria. Albanian exports have been increased, as has the use of alternative kiln fuels across the region. Cement prices, which fell in the second half of last year because of poor demand, have stabilised and should begin to improve in the second half, with price increases having been announced.
The United States is improving and turnover advanced by a further 9.9 per cent to €193.5m, following a 16.4 per cent rise a year ago, and the EBITDA jumped from €4.3m to €10.3m. Florida, a long depressed market where Titan as a big presence, is now recovering strongly on the back of the improving housing market. This has led to market volume growth of around 11 per cent in cement, 15 per cent in aggregates and 4.5 per cent in ready-mixed concrete. Prices in the state have also begun to recover. Separation Technologies, the subsidiary than installs and operates fly ash processing plants, continues to grow and has expanded into industrial minerals.
The Eastern Mediterranean operations, which are essentially in Egypt and Turkey, experienced a four per cent increase in turnover to €157.6m and the EBITDA improved by 2.3 per cent to €49.6m. The reduced availability and sharp price increases in the case of gas have caused problems, though the price increases have generally been passed on. Titan is now investing in coal milling capacity to increase kiln fuel flexibility. The gas shortages have also led Titan to import clinker from it Greek works to grind in Egypt. Turkey showed good growth for the first five months, but the political uncertainty caused some slowing of demand in June.
