Buzzi Unicem: 1Q16 sales up 2.8%
Buzzi Unicem reports that during the 1Q16 group cement sales were up 2.8 per cent from the first quarter of 2015, reaching 5Mt. The volume trend was favourable in the United States (+16.3 per cent) and fairly stable in central Europe and Italy. Eastern Europe reported a decrease of 9.2 per cent, mainly due to the declines recorded in Russia and Ukraine. Ready-mix concrete sales posted a slight decrease (-1.7 per cent) compared to the same period of 2015, to 2.4Mm3.
Consolidated net sales increased from EUR513.4m to EUR540.3m (+5.2 per cent), gross of a foreign exchange effect which was marginally unfavourable for EUR0.9m and a negative change in scope for EUR1.5m. EBITDA closed at EUR50.8m. Gains on disposal of investments contributed with EUR0.5m, while equity in earnings of associates amounted to EUR14.1m (EUR16.1m in 1Q15). As a consequence of the above, 1Q16 closed with a profit before tax of EUR5.4m against a loss of EUR46.2m in March 2015. After taxes, net profit for the period was EUR3.8m (EUR3.6m being the portion attributable to the owners of the company).
Net debt as at 31 March 2016 amounted to EUR1097.9m, up EUR68.2m over year-end 2015. Total capital expenditures of EUR69.3m affected this figure (EUR68.7m in the same period of 2015), of which EUR30.1m related to the expansion project at Maryneal (Texas).
Europe
The performance of cement and clinker sales in Italy recorded a slight increase from the first quarter of 2015, thanks to the favourable trend in export volumes and clinker, which allowed to offset the negative sign in the domestic market. Sales prices confirmed the level of the same period in 2015. The domestic ready-mix concrete sector recorded a decline of some percentage points in production but with prices up. Overall net sales increased from EUR84.2m to EUR84.4m. EBITDA closed with a loss of EUR7.5m, compared to a figure of -EUR8.2m achieved in the first quarter of 2015 (the figure for 2015 included net non-recurring income of EUR3.8m).
In Germany, the building materials demand was consistent with the same period of 2015. The reduction of cement sales volumes is mainly due to the persistant weakness of oil well special products. Ready-mix concrete sales showed a favourable variance, with only marginally weaker prices. Overall net sales amounted to EUR112m (EUR115.1m in 2015) and EBITDA, although slightly improving, remained in negative territory at -EUR0.2m (-EUR0.7m in 1Q15).
In the Czech Republic cement sales softened, with substantially unchanged average prices in local currency. In Poland cement deliveries marked a slight positive change, while ready-mix concrete output recorded a considerable decrease. Sales prices in local currency were lower than in 2015 both for the cement and the concrete sector. In Russia sales in the first quarter of the year were frail, accompanied by an unfavourable variance of unit revenues in local currency as well.
USA
The good weather conditions in this first quarter, compared with the same period last year, which was characterised by extraordinary high rainfall in the South West regions, led to a strong improvement in volumes. Overall cement sales increased, although the significant decline in oil well cement deliveries continued. Average prices in local currency improved by some percentage points.
Ready-mix concrete output, mainly concentrated in Texas, was up on the volumes achieved in the same period last year, with a positive price variance. Overall net sales therefore increased from EUR204.5m to EUR243.5m (+19.1 per cent). The exchange rate effect was favourable for EUR5.2m. EBITDA amounted to EUR46.1m (EUR30.1m in 2015), including a positive foreign exchange effect of EUR1m. The modernisation and expansion works of the plant in Maryneal, Texas are being completed, and the startup of the new kiln line is scheduled at the end of the current month of May.
Mexico (valued by the equity method)
Cement deliveries in the first quarter recorded a slight decrease compared to the volumes achieved in the previous year, which were yet very high, with average prices in local currency considerably improved versus the prior period. Ready-mix concrete sales developed with a similar trend, although with a more marked reduction in volumes. Net sales and EBITDA, in local currency, increased by 6.4 per cent and 22.7 per cent respectively.
The depreciation of the Mexican peso (-18.2 per cent) had an negative impact on the translation of results into euro. With reference to 100 per cent of the associate, net sales decreased from EUR159m to EUR143.1m (-10 per cent) and EBITDA increased from EUR65.7m to EUR68.2m (+3.8 per cent). The equity earnings referring to Mexico, included in the line item that encompasses the investments valued by the equity method, amount to EUR15.1m (EUR13.8m in 2015).
