Buzzi Unicem reported recurring EBITDA of EUR121m for 4Q15 and EUR473m for the full-year 2015. This is above earlier guidance of EUR470m as well as consensus estimate of EUR468m, says analysts Morgan Stanley. Compared to the Morgan Stanley's 4Q15 segmental forecast, the strong performance came from the US, Germany and Russia where the reported EBITDA margins were much higher than analyst expectations. However, this was  offset by a particularly weak performance in Italy due to one-off costs and restructuring expenses.

Net debt was slightly down and after capital expenditure of EUR304m in 2015, this included EUR164m on capacity expansion projects. In 2015 the group sold 25.6Mt of cement up 1.7 per cent on 2014 volumes and 11.9Mm3 of ready-mix concrete, down 0.9 per cent on 2014. Consolidated net sales increased by 6.2 per cent to EUR2662.1m versus EUR2506.4m in 2014, but in Buzzi's domestic market cement and clinker volumes fell by 2.3 per cent.

Below the EBITDA line, income from associates for the full year came in at EUR57m, slightly below expectations, partially due to full utilisation of capacity in Mexico. Net financial expenses came in better than expected at EUR105m (vs MSe at EUR119m). However, income taxes were much higher than expected at EUR94m. The company attributed this to write-off of deferred tax assets derived from tax losses in certain jurisdictions particularly in Italy, which they have carried on the balance sheet for a number of years. It is not clear if Buzzi might still be able to reclaim this in the future when operations in Italy become profitable. Nevertheless, this resulted in a net income miss versus numbers by analysts.

Management estimates that 2016 recurring EBITDA may be able to achieve a slightly favourable variance versus 2015. Consensus is expecting recurring EBITDA of EUR52m for 2016, which implies a 10 per cent increase YoY. Although management is known to be conservative, especially this early in the year before 1Q results, the interpretation of the guidance provided would suggest an increase less than 10 per cent, says Morgan Stanley.