Buzzi Unicem hit by weaker markets
Buzzi Unicem's first-half turnover declined by 5.7 per cent to EUR1273.7m and the EBITDA fell by 24.8 per cent to EUR150.7m as the Italian cement major was hit by weaker markets in Italy, Poland and Mexico. Excluding non-recurring items, the reduction would have been 21 per cent.
The first half trading profit fell by 56.8 per cent to EUR37.8m and the interest charge was reduced by 31.9 per cent to EUR47.6m, with the pre-tax result swinging from a EUR22.6m profit to a loss of EUR8.3m. After a tax charge more than four times the level of the previous year at EUR18.3m and a minorities charge 27.8 per cent lower at EUR10.7m, there was a net attributable loss of EUR37.4m, compared with a profit of EUR3.3m a year ago.
Net debt at the end of June was 6.4 per cent higher at EUR1197.1m, giving a gearing level of 50.2 per cent, up from 43.4 per cent a year earlier.
Capital expenditure was 12.4 per cent higher at EUR81.4m. For the full year Buzzi Unicem is forecasting an EBITDA some 5-10 per cent below that achieved last year, which implies a good second half improvement.
Group cement deliveries declined by 5.8 per cent to 12.3Mt. The prices achieved were higher in most markets, but declined in Poland and to a lesser extent in Luxembourg, the Czech Republic and Mexico. The group ready-mixed concrete deliveries were down by 9.9 per cent to 5.9Mm³.
Italian cement and clinker volume declined by 13.6 per cent, while the domestic market fell more sharply. Buzzi Unicem's better performance reflects increased export shipments. Selling prices improved by 1.3 per cent. Fuel costs declined a bit further, while electric power costs continued to rise. Ready-mixed concrete deliveries dropped by 30.6 per cent in volume terms, but prices improved by a further 4.3 per cent. Buzzi Unicem's Italian turnover came off by 17.5 per cent to EUR202.6m and the loss at the EBITDA level rose from EUR0.9m to EUR17.8m, after charging impairment provisions on trade receivables of EUR10.7m.
In Germany, Dyckerhoff's turnover declined by 5.9 per cent to EUR269m and the EBITDA fell by 33.1 per cent to EUR20.2m. Cement shipments were down by 7.2 per cent to 2.23Mt, with domestic deliveries being 5.1 per cent lower while exports fell by 23.4 per cent and exports to The Netherlands were particularly weak. Underlying ready-mixed concrete deliveries eased by 1.2 per cent to 1.73Mm³, with prices being little changed. Aggregates deliveries were 1.9 per cent lower at 0.47Mt, with prices increasing for sand but declining for gravel. Luxembourg cement volumes came off by 9.6 per cent to 0.56Mt and the average price declined by 2.7 per cent. The turnover was off by 4.6 per cent to EUR51.6m, but EBITDA improved by EUR0.4m to EUR6.6m. Dutch turnover fell by a further 23.2 per cent to EUR36.1m and EBITDA loss more than doubled to EUR4m as volumes fell by 21.5 per cent in ready-mixed concrete and by 18.4 per cent in aggregates.
Poland weakened further and the Polish turnover fell by 14.3 per cent to EUR45.5m and the EBITDA decreased by eight per cent to EUR9.1m. Cement volumes was down by 6.5 per cent to 0.61Mt and prices by 6.6 per cent in local currency, while ready-mixed concrete deliveries fell by 18.3 per cent to 0.28Mm³ and prices by 8.2 per cent. The Czech and Slovak turnover fell by a further 16.2 per cent to EUR53.8m and the EBITDA dropped by 53 per cent to EUR3.7m. Cement volumes fell by another 16.7 per cent to 0.31Mt and the average price eased by 1.3 per cent. In aggregates, volumes declined by 9.0 per cent to 0.57Mt and ready-mixed concrete volumes fell by 12 per cent to 0.59Mm³.
Ukrainian turnover declined by 13.5 per cent to EUR52.6m and EBITDA dropped from EUR4.4m to EUR1.3m. Cement volumes fell 15.1 per cent to 0.7Mt although local prices improved by 4.5 per cent, with concrete prices going up by over two per cent on volumes that were 13 per cent lower. In Russia, turnover improved by 7.4 per cent to EUR113.2m but the EBITDA declined by 12.6 per cent to EUR36m as kiln fuel and electricity costs rose and a fire disrupted production. Cement shipments increased by 2.9 per cent to 1.31Mt. The interest in Suchoi Log in Russia has been increased from 95 to 100 per cent.
The United States operations of the Buzzi Unicem group increased volumes strongly in the south-west, but only slightly in the Midwest giving an overall increase of 4.4 per cent in cement and of 10.4 per cent in ready-mixed concrete. Average cement selling prices increased by 1.8 per cent in local currency. Turnover improved by 8.2 per cent to US$453.2m, which on translation converts into a 6.8 per cent increase to EUR345.1m. At the EBITDA level, there was a 1.2 per cent increase to US$70.3m, which on conversion turns into a 0.1 per cent decline to EUR53.5m.
The 50 per cent-controlled Mexican associate Corporaciòn Moctezuma suffered from a weaker market and increased competitive pressures. Cement deliveries declined by 12.3 per cent and prices in local currency eased by 3.8 per cent. Deliveries of ready-mixed concrete were static, while prices improved by 2.2 per cent. A revaluation of the Mexican currency, compared with a devaluation this time last year, boosted the numbers on conversion, reducing the negative impact of the more difficult market. Turnover declined by 9.0 per cent to EUR119.8m, while the EBITDA came off by 15.4 per cent to EUR42.1m.
