Weaker Brazil markets depress Cimpor's profits

Cimpor has reported a first quarter turnover 7.4 per cent higher at EUR636.6m but the EBITDA declined by 7.2 per cent to EUR123.4m. The trading profit (EBIT) was 17.6 per cent lower at EUR74m. The net financial charge declined by 18.9 per cent to EUR75.3m to give a pre-tax loss of EUR1.3m, compared with EUR3.1m a year earlier. 

At the net attributable level there was a loss of EUR17.2m, compared with a loss EUR10.8m a year earlier. Net debt was 0.6 per cent lower at EUR3522m, but the gearing level rose from 300.6 per cent to 305.3 per cent primarily reflecting exchange rate movements. 

The consolidated cement and clinker deliveries declined by 5.3 per cent to 6.79Mt, with volumes being lower in Brazil, the biggest market by far, Egypt and Mozambique.   

Turnover in Portugal improved by 6.9 per cent  to EUR70.9m and the EBITDA, including Cape Verde, more than doubled going from a EUR4.7m profit to EUR9.7m.  The cement and clinker volumes from Portugal improved by 3.2 per cent to 1.12Mt and domestic deliveries showed an improvement after several years of decline and exports remained good.  Turnover in the Cape Verde Islands improved by 5.8 per cent to EUR6.8m and the cement volume there rose by 5.9 per cent to 46,000t.  Cimpor's international trading and shipping activities further increased turnover by 12.6 per cent to EUR87.9m but its the profit contribution dropped by 70.3 per cent to EUR1.7m.

In Brazil, by far the most important country for Cimpor, the cement and clinker tonnage declined by 12.2 per cent to 2.73Mt but the reduction in turnover was a more modest 9.7 per cent to EUR246.8m.  A weaker economy combined with cost inflation, notably for electricity, led to a reduction in margins and the EBITDA dropped by 39.0 per cent to EUR40.6m. In the period, Brazil accounted for 39.1 per cent of the group cement volume and for 33.8 per cent of the turnover, compared with 42.3 per cent and 40.4 per cent respectively a year earlier. 

Argentina remains the next most important country with a cement volume 6.1 per cent ahead at 1.52Mt and a turnover 44.1 per cent ahead at EUR168.3m. In Paraguay, the cement volume improved by 3.9 per cent to 98,000t and the turnover advanced by 15.5 per cent to EUR14.1m.  The total South American profit contribution declined by 12 per cent to EUR85m.

In Egypt the turnover improved by 3.1 per cent to EUR60.7m though the cement tonnage fell by 12.3 per cent to 0.87Mt, while the impact of higher energy costs was mitigated by increased efficiency. South African turnover was ahead by 21.3 per cent to EUR29.8m as cement volumes improved by four per cent to 0.31Mt. EBITDA advanced thanks to a combination of volume, price and exchange rate movements. 

Mozambique cement deliveries eased by 1.5 per cent to 0.29Mt, reflecting erratic electricity supplies, while turnover improved by 14.8 per cent to EUR32.7m as prices rose.