Titan Group's 1H19 results bolstered by USA

Titan Group recorded a turnover of EUR785.4m in 1H19, up 10.2 per cent on 1H18. This was attributed to a strong performance in the US market and growth in cement demand in southern Europe, along with a return to modest sales in Greece.

EDITDA remained flat at EUR122.2m following challenging conditions in Egypt and Turkey, while group net profit after minority interests and taxes amounted to EUR13.3m versus EUR24.8m in 1H18.

Consolidated turnover in 2Q19 for the group reached EUR422.7m, up 8.4 per cent on 2Q18, while EBITDA reached EUR77.8m in 2Q19, a marginal decline of 1.1 per cent. Net profit reached EUR19.5m, down 18.4 per cent on 2Q18.

Regional results
The USA continued to grow with demand for building materials higher than 1H18, leading to volume growth across all products except fly ash. Profitability improved despite higher costs of imported cement and logistics and the loss of fly ash revenue. Turnover in the USA reached EUR471.8m an increase of 13.9 per cent on 1H18, while EBITDA rose to EUR84.2m, up by 4.9 per cent on 1H18.

In Greece there was a modest increase in volumes thanks to tourism related projects and higher private sector consumption of cement. Commencement of major projects, which had been delayed, are dependent on government initiatives. Turnover in Greece rose to EUR123.3m, up 7.6 per cent on 1H18 and EBITDA rose by 88.1 per cent to EUR9.9m.

In southern Europe construction activity and cement demand rose with impovoed prices. Turnover in the region reached EUR120.7m, an increase of 17.1 per cent on 1H18 and EBITDA also rose by 37.2 per cent to reach EUR32.9m.

However, the eastern Mediterranean region declined with Egypt seeing market contraction of five per cent in 1H19, while the market was characterised by surplus capacity, stagnant prices and rising operational costs. In Turkey, demand continued to decline rapidly and is expected to decline by 30 per cent YoY.  Although prices rose in local currency, they were not sufficient to cover inflation and the weakening Turkish lira. Turnover in the eastern Mediterranean reached EUR69.7m, down 13.5 per cent on 1H18, while EBITDA recorded a EUR4.7m loss versus a positive EUR12.8m in the 1H18.

In Brazil, despite the wet weather, cement volumes at Apodi Cement were stable while revenue for the 1H19 rose by seven per cent.

Group net debt at the end of 1H19 stood at EUR839m, up EUR67m against the end of 2018.

Outlook
Titan Cement expects good potential growth in demand in the USA, more dynamic expansion in southeastern Europe, and positive market improvement in Greece and Brazil. Countering these will be the conditions in Egypt and Turkey.