Titan: profits decline, other than in the USA

Titan reported a four per cent improvement in turnover for last year to EUR1175.9m, having risen by 3.6 per cent in 2012. The US proved to be a particularly bright spot in 2013 for the company, while the rate of decline in its domestic market of Greece eased.

Full-year EBITDA edged ahead by 0.1 per cent to EUR196.0m. Excluding exchange rate movements, turnover would have been ahead by 8.3 per cent and EBITDA by 6.4 per cent.

With a 10.7 per cent reduction in the depreciation charge, the trading profit advanced by 21.7 per cent to EUR79.2m. The net financial charge increased by 35.1 per cent to EUR88.6m and there were no gains from the sale of emission rights last year. The pre-tax loss was increased from EUR1.3m to EUR9.6m and the net attributable loss rose from EUR24.5m to EUR36.1m.

Capital expenditure was kept at EUR50m, but is expected to reach EUR100m this year as capital expenditure is being raised in the USA and money is also expected to be spent on developing alternative fuels in Egypt.

Net debt at the end of December was further reduced by 9.6 per cent to EUR539m, to give a gearing level of 38.0 per cent compared with 38.8 per cent year earlier.

Group sales of cementitious materials increased by 6.8 per cent to 17.2Mt thanks to higher exports from Greece and US volumes beginning to improve. Sales of aggregates were boosted by higher volumes in the United States and rose by some 13 per cent to 12.3Mt, while ready-mixed concrete deliveries emerged 1 per cent higher at 3.43Mm³.

Greek cement consumption continued to decline last year, but by a lower percentage than seen in recent years. Exports, however, did improve further, but margins here remain thin. Titan's Greek and Western European turnover did improve by four per cent to EUR249.8m. EBITDA continued to deteriorate and fell by some 57 per cent to EUR13.9m. Largely reflecting increased export volumes there was no income from the sale of emission rights. With domestic demand at historically very low levels prices are very much under pressure in cement, aggregates and concrete. Titan is expanding the use of alternative fuels, which has traditionally been low in Greece to reduce energy costs and to improve its environmental footprint.

In South Eastern Europe turnover declined by 4.3 per cent to EUR215.5m and EBITDA eased by 1.9 per cent to EUR62.7m as economic activity remained at low levels. Average cement sales in the region showed a modest recovery, but there was no profit contribution this time from the sale of emission rights in Bulgaria. Cement prices the region did recover most what was lost during the second half of the previous year. Like in Greece, Titan worked hard to increase the use of alternative fuels.

Turnover in the United States increased by 11.2 per cent to EUR411m and the EBITDA staged a strong recovery from EUR5.8m to EUR32.1m. This was helped by cement demand recovering in all of Titan's main US markets. This recovery was particularly marked in Florida, where cement consumption advanced by 18.4 per cent on the back of the recovery in housebuilding activity. Volumes also increased in aggregates and ready-mixed concrete. Separation Technologies continued to advance and is expanding by applying its technology, hitherto concentrated on fly-ash, to other minerals.

The Eastern Mediterranean regional turnover suffered from the weakness of both the Egyptian and Turkish currencies but still managed a 1.3 per cent advance to EUR299.7m.  EBITDA declined by 7.1 per cent to EUR87.3m, but the region remains the largest profit earner in the group though its share has declined from 48 per cent to 44.5 per cent. The two per cent fall in Egyptian cement consumption in the year is believed to primarily reflect a restricted gas supply. Egyptian gas prices doubled in less than a year but the higher energy cost has been successfully passed on, though the margin did suffer. The Turkish joint venture managed to increase both domestic deliveries and exports, in spite of some weakness in demand because of the political uncertainty during the second half of the year.