Titan 1Q16 results boosted by US growth
Titan Group posted robust growth in sales and operating performance in 1Q16, primarily on the back of the US market, as well as the improved operation of the plants in Egypt. Consolidated turnover reached EUR337.8m, posting a 19 per cent increase compared to the same period the previous year. EBITDA increased by 86 per cent reaching EUR43.3m.
Net profit after minority interests and the provision for taxes were negatively impacted by foreign exchange translation effects, particularly those resulting from the devaluation of the Egyptian pound against the euro by 19 per cent, resulting in a bottomline loss of EUR18.6m in the quarter versus a EUR6.6m profit in 1Q15.
The US market remains the main engine of growth for the group. Turnover in the US posted a 34 per cent increase and reached EUR174.4m (a 32 per cent increase in US$-terms), while EBITDA tripled, reaching EUR17.9m versus EUR5.8m in the same period in 2015.
In Greece private building activity remained practically dormant, deeply affected by the crisis of the Greek economy and the attendant continued uncertainty. The imposition of capital controls further encumbered already challenging conditions. Domestic consumption, at its current low levels, was mostly related to public works. Total consumption decreased versus the first quarter of 2015.
The emphasis placed on exports, together with lower energy costs, mitigated to a large extent the impact of the decline in the domestic market. Total turnover in group region Greece and Western Europe, in the course of the first quarter of the year declined by 4.5 per cent and stood at EUR62.4m. EBITDA reached EUR8.3m versus EUR9.2m in 1Q15. Turnover in Egypt in the 1Q16 increased by 8.3 per cent reaching EUR65.2m and EBITDA reached EUR10.8m versus EUR4m the same period the previous year.
Markets in southeastern Europe were favourably affected by the milder winter compared to the previous year, posting a seasonal spike in results. Turnover increased by 27.6 per cent reaching EUR35.8m and EBITDA reached EUR6.3m versus EUR4.2m in the 1Q15.
In Turkey results at Adocim (in which Titan Group holds a 50 per cent stake) were higher compared to the same period the previous year due to the much milder winter, with corresponding profit attributable to Titan settling at EUR0.7m.
Group net debt at the end of 1Q16 stood at EUR605m, EUR17m lower than at the end of the 1Q15.
The Group is currently in the second year of implementation of its EUR350m ‘Titan Growth Capex Program’ which consists of a series of investments aimed at expanding activities (primarily in the US), reducing production cost (including investments to allow the utilisation of solid and alternative fuels in Egypt) and, finally, safeguarding the production facilities’ competitive performance. Group capex in 1Q16 stood at EUR27.3m versus EUR34.9m in the same period in 2015.
The recovery of the construction industry in the US is expected to continue, fuelled by the residential and commercial segments and to a lesser extent, public works. Considering the market’s growth rates and positive prospects, the group has budgeted for an extensive investment programme in the US for 2016 as well, aiming at strengthening the group’s competitive position and further improving operational performance.
