Titan reports 13% advance in 1Q turnover but EUR6.2m net loss
Greece-based Titan Group reported a 12.5 per cent rise YoY in consolidated turnover to EUR362.7m in the first quarter of 2019 ended 31 March 2019. The company attributed the higher sales to a robust US market and growth in southeastern Europe.
EBITDA was up two per cent to EUR44m as the company faced a challenging business environment in Egypt and Turkey. Titan's net result was impacted by higher depreciation charges and unfavourable foreign exchange rates, recording a EUR6m loss (1Q18: EUR1m net profit).
Group net debt at the end of the 1Q19 was up EUR117m to EUR889m, of which EUR59m is attributed to the adoption of the IFRS 16 regulations in 2019. Capital expenditure increased to EUR23.1m in the 1Q19 when compared with EUR19.2m in the 1Q18.
US market
In the US the market for building materials expanded, leading to an improvement in Titan's results. Better weather, the timing of maintenance work and the strengthening of the US dollar against the euro further supported the company's positive US results in the 1Q19. Turnover rose 17.5 per cent to EUR223.9m while EBITDA increased by 41.8 per cent YoY to EUR41.2m.
Greece
In its domestic market of Greece, Titan reported an improved market at the start of the year from very low levels. However, major new projects are faced with further delays and growth is slowing. Regularly scheduled maintenance of facilities also impacted results. Total turnover in the Greece and western Europe region advanced by six per cent YoY to EUR56.1m in the 1Q19. However, higher maintenance charges led to a EUR0.8m operating loss, from a EUR2.1m profit in the 1Q18.
Southeastern Europe
The construction market in southeastern Europe continued to grow in the first three months of 2019 and milder weather also supported demand. Titan's turnover in the region advanced 41.4 per cent YoY to EUR48.4m while EBITDA more than doubled to EUR9.1m in the first quarter of 2019 when compared with the year-ago period.
Eastern Mediterranean
In the eastern Mediterranean, the business climate was more challenging. The Egyptian market contracted by seven per cent YoY in the 1Q19, which when combined with new production capacity, led to a decline in Titan's utilisation rates. Higher imposed input costs and stagnant prices were additional factors in wiping out profitability. The economic downturn and uncertainty in Turkey led to a sharp drop in market demand. Therefore, total turnover for the eastern Mediterranean region fell 23.5 per cent to EUR34.2m. The group also recorded a EUR5.2m operating loss versus an EUR8.4m profit in the 1Q18.
Brazil
In the 1Q19 Brazilian market cement demand reversed the trend of the last four years, edging up 1. 2 per cent YoY in the Northeastern region, where the 50/50 joint venture with Dias Branco, Apodi, operates.
Outlook 2019
"The overall Group outlook for 2019 is favourable. There are positive demand dynamics in the USA, in Southeastern Europe, in Brazil and albeit somewhat delayed in Greece. Countering these, conditions should remain challenging in Egypt and Turkey," said the company in a statement.
