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Titan Group’s FY11 results hit by collapse of Greece’s construction sector

World Cement,

FY11 results

Titan Group has released its financial results for FY11, which indicate an 89% decrease in net profits compared to 2010. The Group’s turnover dropped 19% to €1091 million, whilst earnings before interest, tax, depreciation and amortization fell 23% to €243 million. The company attributes the decline in profits to higher fuel costs and regional market issues such as the collapse of the construction sector in Greece and the impact of political upheavals in North Africa.

In a bid to curtail costs, the Group has introduced a two year restructuring plan which aims to save €26 million pa once implemented. In 2011, costs were reduced to €122 million, 6% less than in 2010.

Last year, the company sold 15.3 million t cement, 3.7 million m3 ready mixed concrete and 10.9 million t aggregates.

Regional markets

Titan Group was affected by the collapse of the construction sector in Greece, following cuts to public infrastructure programmes. The country’s financial worries have also had an impact on investment in private housing, which has fallen by 70% over the last 5 years. Turnover for Greece and Western Europe declined 39% to €269 million.

Political uncertainty in North Africa has prevented exports to the region, with Egypt’s economy and construction sector being hit in particular. At the same time, cement capacity expansion in the region has resulted in a higher level of supply than demand, thereby affecting cement market prices. However, there has been increased demand in the Turkish construction sector due to the country’s economic growth.

Economic recovery in areas of Southeastern Europe resulted in greater prosperity for the construction sector in this region. Despite higher fuel prices and increased competition, cement sales volumes rose slightly and turnover reached €241 million, an increase of 2%.

Titan Group’s turnover in the USA decreased slightly to €304 million. The company attributed this to a continued lack of consumer confidence in economic recovery and stagnation in the construction sector.

Prospects for 2012

Whilst the group is optimistic about increased cement consumption in the USA and Southeastern Europe, it does not expect the situation in Greece to greatly improve. The company expects demand for its products to decline further and overall cement consumption to be a quarter of the levels experienced five years ago.

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