Buzzi Unicem's 1H18 net sales fall to EUR1337.4m
Buzzi Unicem's net sales for the 1H18 were down 1.2 per cent to EUR1337.4m compared to EUR1353.8m in 2017, while EBITDA decreased by 5.7 per cent from EUR241.1m to EUR227.4m. The currency trend had a net unfavourable impact of EUR72.2m on net sales and EUR18.8m on EBITDA. The income statement for the six months closed with a net profit of EUR123m, compared to EUR117.6m in the same period of 2017. Consolidated EBITDA amounted to EUR227.4m, versus EUR241.1m in 2017 (-5.7 per cent).
Cement sales of the group in the 1H18 increased by 3.8 per cent YoY to 12.9Mt from 12.5Mt. Changes were favourable or neutral in all markets where the group is present, except for a slight decrease in Luxembourg, and a much more marked one in Ukraine. Ready-mix concrete output was still in line with the previous year and equal to 5.9Mm3 (-0.7 per cent).
Net debt as of 30 June 2018 stood at EUR894m, up EUR31.5m on 31 December 2017.
Central Europe
Thanks to the additional contribution of the shipments from the former Cementizillo plants, Buzzi Unicem's hydraulic binder and clinker sales in Italy closed the first six months clearly up from the same period last year (+23.2 per cent). EBITDA for the 1H18 closed with a negative balance of -EUR8.9m.
In Germany cement sales increased by 1.1 per cent YoY in the 1H18 with average prices recovering. Since May, the activities of the newly-acquired Seibel & Söhne, which operates an integrated cement plant in Erwitte, North Rhein, have been consolidated line by line.
The German ready-mix concrete sector showed a decrease in production compared to the same period in 2017 but with prices recovering. Overall net sales amounted to EUR287.2m (EUR282.5m in 2017), up 1.6 per cent, while EBITDA came in at EUR27.8m compared to EUR32.7m (-15 per cent).
In Luxembourg and The Netherlands, cement deliveries (including exports) closed the first half-year down (-5.3 per cent), with average unit revenues marginally strengthening compared to the previous year. The ready-mix concrete output rose (+16.9 per cent), associated with some improvement in prices. Net sales totalled EUR966.5m, up 6.4 per cent on 1H17 and EBITDA rose by EUR2m to EUR8.3m.
Eastern Europe
In the Czech Republic and Slovakia, cement sales in 1H18 maintained a very favourable pace (+8.6 per cent), with average prices in local currency, which did not show any relevant changes. The ready-mix concrete sector, which also includes Slovakia, showed high production levels (+9.4 per cent) with slightly progressing prices. Overall net sales, favoured by the positive exchange rate effect, increased from EUR65.6 to EUR75.7m (+15.5 per cent).
In Poland cement shipments improved slightly when compared with volumes achieved in the same period of the previous year (+1 per cent). Ready-mix concrete output was accelerating much more lively (+12.9 per cent). EBITDA improved from EUR9.2m to EUR16.4m.
In Ukraine the cement volumes sold by our industrial plants fell sharply (-18.7 per cent), with average prices in local currency growing lower than core inflation. Net sales for the period stood at EUR35.5m, down EUR7.1m compared to EUR42.6m in 2017. EBITDA fell from EUR8.8m to EUR1.6m.
Although oil well cement faced some decline, in Russia deliveries in the first half of the year slightly improved (+1.8 per cent) compared to the volumes achieved in the previous year, together with a favourable change of average unit prices in local currency. However, the weakening of the rouble had a considerable impact on the results in euros. Net sales stood at EUR82.6m, down EUR4.4m from EUR87m in the same period of 2017. EBITDA dropped from EUR22.9m to EUR19.6m.
USA
Cement sales, which recovered well during the spring months, particularly in the Southeastern and Southwestern regions, confirmed (with a rounding up) the level reached in the first half of the previous year. Cement selling prices in local currency showed an average growth of a few percentage points and investments on expansion projects totalled EUR18.5m with the second phase modernisation of the Maryneal plant (TX) and rebuild of the dedusting system at Cape Girardeau (MO).
Ready-mix concrete output, mainly present in Texas, also recovered in the second quarter and closed with volumes in line with the first six months of 2017 and a slightly positive variation in selling prices. Net sales in dollars amounted to US$610.9m, up 0.7 per cent from US$606.9m in the same period of 2017. EBITDA stood at US$173.1m, down one per cent on US$174.8m in 1H17.
Mexico
Cement sales of the joint venture were influenced by the uncertainty and the expectations associated with the results of the general elections in July. Cement deliveries showed a downturn, however, with average prices in local currency improving. Ready-mix concrete sales were fairly weak but with a strong increase in prices in local. Net sales and EBITDA in pesos recorded a decrease of 3.5 per cent and 2.8 per cent, respectively.
Outlook
After a start to the year penalised by unfavourable weather conditions, particularly in the USA and central Europe, the climate of the second quarter returned to normal almost everywhere. Trading conditions in the first six months of 2018 were at a consolidated level quite in line with the same period of 2017 but not consistent with the moderate growth assumptions that the company had initially envisaged for the current year.
In the 2H18, Buzzi Unicem believes that in the United States of America the activity level will remain high and this will allow to achieve a positive volume and price effect. However, the company’s forecast indicate that the negative differential accumulated during the first six months in terms of operating results can only be filled to a limited extent.
