Titan helped by stronger US performance
Titan's turnover increased by 4.9 per cent to EUR888.3m in the first nine months of 2013, but the EBITDA declined by 5.5 per cent to EUR153.6m. However, the third quarter did see a 21.9 per cent improvement in the EBITDA. There was no credit from the sale of emission rights compared with a EUR24m gain at this stage last year in respect of Greece and Bulgaria.
The trading profit for the nine months was 6.7 per cent lower at EUR65.2m and, after a 55.1 per cent jump in net financial charges, the pre-tax result went from a EUR26.1m profit to a EUR2m loss. There was a net attributable loss of EUR14.6m compared with a profit of EUR2m a year earlier. Net debt at the end of September was 10.9 per cent lower than a year earlier at EUR6594m. Capital expenditure during the nine months was further reduced by 12.3 per cent to EUR30m.
Shipments of cementitious materials improved by a further 9.2 per cent in the nine months to 13.1Mt, while aggregates sales, now primarily in the United States, advanced by some 14 per cent to 8.9Mt. Deliveries of ready-mixed concrete improved by 0.8 per cent to 2.54Mm³.
Greece's relative importance to the group declined further as the EBITDA dropped by 62.7 per cent to EUR12.4m, or just 8.1 per cent of the group total. The Greek and Western European turnover did advance by five per cent to EUR189.7m, or 21.4 per cent of the group total, thanks to increased export shipments, but these are at a much lower margin than domestic deliveries. Domestic demand accounted for just 17 per cent of Titan's domestic manufacturing capacity, and continued to decline, albeit at a somewhat reduced pace. It is, however, the seventh successive decline in Greek cement consumption and pricing is under continued pressure. The provision for bad debts covered 28 per cent of gross receivables at the end of September, a ratio similar to a year ago.
South Eastern Europe represented 18.5 per cent of turnover and 31.5 per cent of EBITDA. The turnover declined by six per cent to EUR164.4m and the EBITDA was 11.2 per cent lower at EUR48.5m. Domestic cement deliveries across the region were slightly ahead in tonnage terms and prices did show some recovery, though not sufficient to offset the notable price decline during the second half of last year. Construction activity across the region remains at historically low levels. The use of alternative fuels was increased, notably in Bulgaria.
The US turnover recovered by a further 12.0 per cent to EUR305.8m, or 34.4 per cent of the group total. The EBITDA advanced strongly from EUR3.4m to EUR23.1m profit, which represents 15.0 per cent of the group total. The US improvement was notably helped by a strong recovery in the depressed Florida residential market. Florida does represent around 50 per cent of Titan's US assets. During the first nine months of the year, cement consumption in the South Atlantic region of the USA rose by 9.2 per cent compared with a national average growth rate of 4.1 per cent. Cement prices are increasing and price increases of US$8/st to US$10/st have been announced from the beginning of January, 2014. Allied products, such as fly ash, aggregates, ready-mixed concrete and concrete products showed good volume improvements.
In the Eastern Mediterranean region, turnover improved by 4.4 per cent to EUR228.4m, or 25.7 per cent of the group total. The EBITDA, however, eased by 2.4 per cent to EUR69.8m but remained the largest profit earner, accounting for 45.4 per cent of the group total. This was in spite of a weaker Egyptian currency. A three per cent decline in cement consumption in Egypt reflects restricted gas supplies and also a doubling of gas prices in less than a year. The Turkish associate saw good growth in the period, in spite of some temporary weakness in June, related to the civil disturbances, and a weaker currency.
