Cimpor hit by the weakness in Brazil

Cimpor's nine month turnover declined by 1.2 per cent to EUR1,927.9m and the EBITDA came off by 14.2 per cent to EUR395.1m as cement deliveries in Brazil, Egypt and South Africa fell by 15.8 per cent, 13.8 per cent and 7.7 per cent respectively. Argentina, on the other hand, improved shipments by 9.3 per cent.

The trading profit (EBIT) came down by 22.7 per cent to EUR248.5m and the net financial charges declined by 4.6 per cent to EUR274m, to give a pre-tax loss of EUR25.5m compared with a profit of EUR34.4m at the same stage last year. The tax charge was 63.4 per cent lower at EUR17.2m and the net attributable loss rose from EUR12.7m to EUR42.7m.

Net debt at the end of September stood at EUR3290m, 9.4 per cent lower than a year earlier, giving a gearing level of 8.57 times shareholders' funds. Capital expenditure in the period was reduced by 22.1 per cent to EUR109m.

Group shipments decline
Group cement and clinker shipments declined by 7.2 per cent to 21.11Mt. The turnover from trading and shipping activities fell 2.6 per cent to EUR226.5m, while its contribution to EBITDA was down by 38.9 per cent to EUR7.8m.

Domestic improvements
The Portuguese turnover improved by 2.5 per cent to EUR217.8m though cement and clinker sales declined by 4.1 per cent to 3.3Mt, with domestic deliveries at long last recovering. Portugal's share of the group's cement and clinker volume was improved to 15.4 per cent compared with 14.8 per cent a year ago.

The Cape Verde Islands sold 7.4 per cent less cement at 0.13Mt, with the turnover being 2.6 per cent lower at EUR20.1m.

The Portuguese and Cape Verde EBITDA improved by 95.2 per cent to EUR41m, entirely reflecting the improvement in Portuguese domestic sales.

Brazil reductions
The Brazilian turnover fell by 24 per cent to EUR680.7m and remains the largest contributor in spite of a further fall in the value of the value of the currency and the EBITDA dropped by 46.9 per cent to EUR124.4m.

Cement output in Brazil declined by 15.8 per cent to 8.12Mt, or from 42.4 per cent of the group total to 37.8 per cent. In the third quarter there was a 20 per cent reduction as the economy slowed further. In the year to date, two grinding centres and four batching plants have been closed.

Argentina & Paraguay
Argentina is the second largest source of turnover, contributing EUR563.4m, or 26 per cent of the group total, up from 17.4 per cent, a jump of 46.4 per cent.

Cement shipments improved by 9.3 per cent to 4.93Mt in the period and the group subsidiary Loma Negra is the Argentinean market leader with a 46 per cent market share.

Cimpor’s operations in Paraguay sold 3.1 per cent more cement at 0.3Mt and the turnover improved by 5.1 per cent to EUR40.6m, in spite of import pressure.

EBITDA from Argentina and Paraguay improved by 66.7 per cent to EUR141.1m, making it the largest source of profit for the first time.

Egyptian fuel challenges
In Egypt, cement deliveries declined by 13.8 per cent to 2.48Mt as some competitors were able to produce more again and not having to buy in clinker from Cimpor. The Egyptian turnover declined by 10.4 to EUR166.1m. The Egyptian profit contribution suffered from a 20 per cent increase in fuel costs, but this should reverse when the EUR45m investment in a coal mill comes on-stream next year.

Rest of Africa operations
In Mozambique, cement volumes improved by 2.5 per cent to 1.14Mt and the turnover was up by 11.3 per cent to EUR120.2m, in spite of electricity supply problems.

South African cement and clinker deliveries declined by 7.7 per cent to 1.07Mt, following the 21.5 per cent rise seen at this stage last year on the back of large clinker sales. Clinker sales this year have been well down, but cement deliveries improve by more than five per cent.

EBITDA from Africa declined by 25.1 per cent to EUR81.4m.