Titan 1H17 turnover reached €773.8m up 6.9%

Τitan Group's 1Q17 results saw consolidated turnover was EUR773.8m (US$905.4m), posting a 6.9 per cent increase compared to the 1H16. EBITDA increased by 18.9 per cent, reaching EUR142.1m. Net profit after minority interests and the provision for taxes increased by 51.4 per cent and stood at EUR13.9m, versus a net profit of EUR9.2m in the respective period of 2016.

Consolidated turnover for the second quarter increased by 6.7 per cent to EUR412m. EBITDA grew by 19.5 per cent to reach EUR91m. Net profit after minority interests and the provision for taxes stood at EUR17.8m, recording a 35.9 per cent decrease versus the 2Q16.

Regional overview
In the US economic growth and the increase in employment continued to support the recovery in the housing market. In total, for the 1H17, turnover in the US posted a 22.4 per cent increase and stood at EUR456m while EBITDA increased by 77.2 per cent to EUR92.4m.

In Greece building activity remained depressed. The conclusion of certain major infrastructure projects during the first months of 2017 in conjunction with the stagnation of private building activity, resulted in a decline in cement consumption in the 1H17. Export volumes remained high, absorbing the greater share of the plants’ production. Low domestic sales volumes, coupled with increased energy costs, resulted in a decline in profitability. Group turnover for Greece and western Europe for the 1H17 declined by 3.2 per cent reaching EUR129.1m while EBITDA fell by 30.4 per cent compared to the 1H16 to EUR13.7m.

Demand in the markets of southeastern Europe increased, as building activity was apparently boosted by ongoing elections in the first half of the year. However, market dynamics did not allow for energy cost increases to be passed on to selling prices, resulting in lower operating profitability. Total turnover increased by 11.3 per cent to EUR108m while EBITDA declined by 10 per cent to EUR23.6m versus EUR26.2m in the 1H16.

In Egypt the economy is adjusting to the large devaluation of the Egyptian pound in 2016. Construction activity declined in 2017, particularly in the first quarter of the year. Turnover in the first half was EUR80.7m recording a significant increase in local currency but a 33.3 per cent decline in euro-terms while EBITDA reached EUR12.4m, a 42.1 per cent decline in euro-terms.

In Turkey demand recovered after a heavy winter and grew during the second quarter. However, the start of two new plants in the area where Adocim operates resulted in a decline in sales volumes. The net result attributable to Titan was a EUR0.4m loss versus a profit of EUR2.2m in the 1H16.

Finally, in Brazil the improvement in key macroeconomic indicators (inflation, interest rates, foreign exchange parity), has not yet translated into an improvement in demand and the construction market continued to decline. Cement demand in the country fell by nine per cent in the 1H17.

Group capital expenditure in the 1H17 reached EUR72m, EUR10.4m greater than in the 1H16 and mostly related to the expansion of activities in the US.

Group net debt as at 30 June 2017 stood at EUR787m, EUR126m higher compared to 31 December, 2016.

Outlook for 2017
Prospects for the group in 2017 remain positive, mainly due to the improvement of results in the US. The recovery of the construction industry in the US, and in particular on the east coast where the group is active, should continue.

In Greece demand is anticipated to be markedly below that of 2016. Following the completion of the major highway projects, new infrastructure projects are still in the planning phase and are not expected to sustain demand in 2017. Private building activity remains at exceptionally low levels, despite certain new projects in the tourism industry. Domestic cement production will continue to be channelled mostly towards export destinations.