Buzzi Unicem expects to report EBITDA close to EUR580m

Buzzi Unicem's turnover in 2017 improved by 5.1 per cent in 2017 to EUR2806m, with a like-for-like improvement of 3.7 per cent after adjusting for the acquisition of Zillo and currency movements. The company expects to report a preliminary EBITDA of nearly EUR580m in 2017 – below their latest guidance. The cement producer attributes the shortfall to a challenging environment in December and expects the impacting factors to be temporary and not affect the company's positive outlook for 2018.

Net debt at the end of December was 8.4 per cent below the level seen a year earlier at EUR863m. Group cement and clinker deliveries in 2017 increased by 4.4 per cent to 26.8Mt, while ready-mixed concrete deliveries were 3.1 per cent ahead at 12.3Mm³.

Buzzi Unicem's Italian turnover benefitted from the initial consolidation of the Zillo group for the second half.  That helped to bring about a 19.5 per cent advance in cement and clinker volumes, compared with an overall increase in domestic Italian cement consumption of just 0.3 per cent.  Exports of cement and clinker were ahead. Buzzi Unicem’s Italian turnover improved by 14 per cent to EUR428m, while on a like-for-like basis the increase would have been 2.7 per cent. Ready-mixed concrete sales improved by 11.7 per cent, largely thanks to acquisitions. 

The German turnover improved by 2.7 per cent to EUR588m. Cement deliveries were 4.5 per cent higher, helped by a good demand for oilwell cement, which continues to see a recovery in demand.  Ready-mixed concrete volumes declined by five per cent, but prices are showing some recovery. The German outlook is positive, with growing demand for housing and for civil engineering projects. Luxembourg cement volumes improved by a further 4.5 per cent with the average selling price seeing a slight improvement. Ready-mixed concrete volumes in the Benelux improved by 15.8 per cent, there was some weakness in the price. The Luxembourg and Dutch turnover improved by 6.4 per cent to EUR187m. 

The Polish turnover had the benefit of the recovery of the zloty and improved by 2.1 per cent to EUR97m, while at constant exchange rates there would have been a 0.4 per cent decline. Cement deliveries improved by 0.7 per cent and exports increased, but so did cement imports into Poland. However, the outlook is positive on the back of European structural funds. In ready-mixed concrete, volumes were down by 7.9 per cent, but prices remained stable. In the Czech Republic and Slovakia, turnover advanced by 8.6 per cent to EUR148m, which at constant exchange rates would have been reduced to 6.4 per cent. Cement volumes improved by 8.2 per cent on prices that were marginally lower. In ready-mixed concrete, volumes were recovered by 10.5 per cent and the average selling price was also ahead. 

Ukrainian turnover recovered by a further 18.5 per cent to EUR95m. Dyckerhoff’s cement deliveries eased by 1.5 per cent and prices in local currency were well ahead in this high-inflation environment. Russian cement shipments were boosted by the sale of oilwell cement and ordinary domestic cement saw a slight price improvement as markets improved in the second half. The turnover benefitted from the ruble recovery and improved by 19.4 per cent to EUR184m. Without the negative exchange rate effect, it would have improved by a more modest 6.2 per cent.

In the United States, turnover edged ahead by 0.2 per cent to EUR1120m. In dollar terms the increase was rather better at 2.2 per cent. Cement deliveries suffered as a result of the weather impacts but finished the year with a virtually unchanged volume, thanks to a strong third quarter. However, Texan consumption suffered from hurricane damage. Ready-mixed concrete deliveries, primarily carried out in the South West, declined by a further 3.5 per cent, because of weather effects in Texas.   

The 50 per cent-owned Mexican associate Corporación Moctezuma saw turnover improve by 12.7 per cent to EUR686m as a result of the weakness of the Mexican currency and at constant exchange rates the sales increase would have been 16.3 per cent. Cement shipments advanced broadly as planned, but ready-mixed concrete deliveries were lower as cement became a more expensive raw material.

The full 2017 results are to be published on 28 March.