Buzzi Unicem returns to a net profit

On a turnover just 0.1 per cent lower at EUR2506.4m, Buzzi Unicem's underlying EBITDA did increase by 7.1 per cent to EUR404.8m in 2014, while at the headline level there was a 4.8 per cent advance to EUR422.7m.

Following a 23 per cent reduction in impairment charges, depreciation and amortisation, the trading profit (EBIT) more than doubled from EUR86.5m to EUR178.7m. After a net interest charge 52.1 per cent lower at EUR53.1m, the pre-tax profit jumped from just EUR16.0m to EUR175.6m. At the net attributable level there was a swing from a EUR50.7m loss to a profit of EUR116.6m.

Net debt at the end of the year was reduced by 3.1 per cent to EUR1062.7m, while net shareholders' funds improved by 3.3 per cent to EUR2,273.5m giving a gearing level of 46.7 per cent.

Group cement shipments were 1.8 per cent higher at 25.1Mt, while ready-mixed concrete deliveries improved by 1.4 per cent to 12Mm³.

Italian domestic cement deliveries fell for the eight consecutive year, giving a total decline from the 2006 peak of 57 per cent. Group cement and clinker production fell by 7.6 per cent and lower export volumes augmented the negative effect of falling domestic cement demand. The average selling price declined by 6.6 per cent, partially reflecting a change in the product mix with more clinker being sold. The profit contribution from the sale of emission rights rose from EUR4.5m to EUR10.8m. Ready-mixed concrete volumes showed a 0.7 per cent recovery after two years of double-digit decline, though the average selling price came off by 5.3 per cent. The Italian turnover declined by 9.3 per cent to EUR391.5m and the EBITDA loss increased from EUR16.2m to EUR18.3m.

The German turnover increased by 1.7 per cent to EUR603.4m, while the EBITDA declined by 18 per cent to EUR88.6m, in a stable pricing environment. Excluding exceptional items, EBITDA was 15.3 per cent lower at EUR12.4m. Cement deliveries improved by 3.7 per cent to 6.1Mt and the average price improved by 0.2 per cent, with exports and sales of white cement were higher, sales of oil well cement declined modestly. Ready-mixed concrete deliveries were stable, while the price was off by 0.3 per cent. The Luxembourg turnover declined by 3.2 per cent to EUR105.7m and EBITDA came off by 9.6 per cent to EUR17.8m. Cement deliveries were 1.6 per cent lower at 1.15Mt and ready-mixed concrete deliveries were off by 6.6 per cent. The Dutch turnover fell by a further 16.4 per cent to EUR57.9m but the EBITDA loss declined from EUR8.2m to EUR1.9m. Dutch ready-mixed concrete deliveries fell by a further 11.9 per cent to 0.59Mm³.

Polish turnover declined by 11.9 per cent to EUR89m while the EBITDA fell by 32.9 per cent to EUR18.2m, though excluding non-recurring items the reduction was a more modest 23 per cent. Cement deliveries fell by 17.6 per cent, while the price came off by 1.3 per cent. Ready-mixed concrete volume, on the other hand, 6.1 per cent improvement though prices eased by 1.1 per cent In the Czech Republic and Slovakia, turnover improved by 1.4 per cent to EUR133.6m and EBITDA advanced by 40.9 per cent to EUR27m. The cement volume staged a 14.6 per cent recovery to 0.83Mt though prices came off by 2.9 per cent and ready-mixed concrete deliveries improved by two per cent though prices eased by 1.2 per cent.

Ukrainian turnover fell by 28.9 per cent to EUR88.1m and EBITDA came off by 25.5 per cent to EUR3.8m as the value of the local currency collapsed. At constant exchange rates turnover and profit would have increased by 4.6 per cent and 9.6 per cent respectively. Cement deliveries improved by 2.3 per cent to 1.7Mt and the local price improved by 3.1 per cent, but ready-mixed concrete deliveries fell by 27.5 per cent. In Russia, turnover declined by 15.6 per cent to EUR209.9m while the EBITDA dropped by 20.7 per cent to EUR73.4m as the value of the rouble fell. Cement shipments were 1.4 per cent lower at constant scope as demand fell off in the final quarter, with shipments of oil well cement being particularly weak, showing a 10.2 per cent reduction.

The United States turnover rose by 17.3 per cent to EUR856.1m and the EBITDA advanced by 37.3 per cent to EUR207.3m, and helped by improved volumes and prices the EBITDA margin rose from 20.7 per cent to 23.8 per cent. Cement shipments rose by another 9.5 per cent to 8.10m tonnes and the average selling price improved by 6.7 per cent in local currency. Ready-mixed concrete volumes advanced by 9.3 per cent and prices improved by 12.3 per cent. Buzzi Unicem should see a further results improvement in 2015, helped by a stronger dollar as well as continued volume growth.

The 50 per cent-owned Mexican associate Corporaciòn Moctezuma suffered from a further weakening of the Mexican peso but the total turnover increased by 11.6 per cent to EUR521.9m and the EBITDA rose by 21.2 per cent to EUR187.8m as the margin recovered to 36.0 per cent from 33.2 per cent in the previous year. Cement deliveries showed a more favourable trend during the year and pricing was somewhat better. Ready-mixed concrete deliveries again modestly lower but average selling prices did improve thanks to a new strategic positioning and an overall reduction in the number of active batching plants.