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Buzzi Unicem volumes rise but earnings take a hit

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World Cement,

Cement sales were up in the first six months of the year at Buzzi Unicem. The Italian building materials company reported sales volumes of 12.9 million t of cement between January and June of this year, a 3.7% increase on the previous year. Earnings were however impacted by a strong euro against the dollar and ruble, partially offset by €11.0 million of non-recurring income in 1H18.

Cement sales volumes “were favourable or neutral in all the markets where the company is present, except for a slight decrease in Luxembourg, and a much more marked one in Ukraine,” the company said in its results statement.

Consolidated earnings were €227.4 million in the first six months of the year, compared to €241.1 million last year.

Trading conditions returned to more normal condition in 2Q18, after the severe weather conditions in the first three months of the year. Despite this, the results were “not consistent with the moderate growth assumptions that we had initially envisaged for the current year,” the company said.

As a result, earnings will reach “a level very similar to that of the previous year,” although there remains some uncertainty related to foreign exchange rates.

Results in the US – the company’s largest market – were disappointing. Even excluding the effects of the weak dollar and other non-recurring items, earnings finished down 13.6%, due to an increased in production, distribution, and overhead costs well above net sales development.

Despite recent appreciation of the dollar, “our forecasts indicate that the negative differential accumulated during the first six months [in the US] in terms of operating results can only be filled to a limited extend,” the company said.

The company is currently in the process of significant investment in its US plants. Of the €18.5 million reported expenditure on property, plant and equipment in 1H18, almost all was related to the second phase of the modernisation of the Maryneal plant in Texas and to the rebuilding of the dedusting system at Cape Girardeau, Missouri.

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Cement news 2018