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Buzzi Unicem reports strong 1H14 marred by local currency depreciations

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World Cement,

Buzzi Unicem has reported its results for the first half of 2014, which show cement sales volumes are up 5.6% from 1H13. Though the Italian market is still declining, this has been offset by positive developments in Ukraine, Russia and the US. However, foreign exchange effects have dampened profitability, particularly in terms of the depreciation of the local currencies in Russia and Ukraine.

Net sales for 1H14 were up 2.7% y/y to €1180.7 million, while EBITDA increased 27.7% y/y to €138.5 million. Overall, the trend in prices in local currency was favourable and the volumes effect was positive in all markets except Italy, where volumes were more or less consistent with 1H13, and Poland, which performed poorly in 2Q14.

Geographical highlights

Cement volumes for the first half reached 11.7 million t, a 5.6% increase from 1H13, while ready-mix concrete output increased 8.5% to 5.9 million m3. Particular highlights include:

  • Germany: cement volumes increased 11.6% y/y with almost stable prices; net sales increased 11.4% and EBITDA was up 16.7% at €23.5 million.
  • Luxembourg: cement and clinker sales up 6.8% y/y; net sales up 7.4% at €55.4 million and EBITDA increased from €6.6 million to €7.8 million.
  • Czech Republic and Slovakia: cement volumes maintained a good pace of growth, achieving a 1H14 increase of 24.9%, though sales were impacted by the weaker Czech koruna.
  • Ukraine: Despite the uncertain political situation, cement volumes rose 6.6% and prices were higher on average than in 1H13. Net sales were down at €43.3 million due to the depreciation of the local currency. At constant exchange rate, net sales would have been up 11.2%.
  • Russia: cement volumes increased 5.7% thanks in part to the mixing and shipping terminal in Omsk. Cement prices were also up, though net sales fell 9.3% due to the depreciation of the ruble.
  • USA: Sales volumes up 6% despite the slow start to the year caused by harsh weather conditions. Overall net sales grew 11.5% to US$505.6 million and EBITDA was up 15.6% to US$81.3 million. However, when translated into euros, net sales increased by 6.9% and EBITDA by 10.8% due to unfavourable foreign exchange effects.
  • Mexico: Corporación Moctezuma reported net sales and EBITDA up 10.8% and 19%, respectively.


Results in the first half of 2014 were above expectations. The major operating variables (demand, prices, costs) have been and will continue to be rather different in the various geographical areas of presence, and precisely:

  • An ongoing recession phase in Italy.
  • A good recovery in the US.
  • Overall stability in Central Europe.
  • Quite favourable prospects in Eastern Europe’s EU countries (the Czech Republic, Poland) and more uncertainty in Ukraine and Russia, where the macroeconomic imbalances add to the local and international political tensions.

Based on the above considerations, Buzzi Unicem believes that, for the group as a whole, the next six months will post an operating profitability similar to the previous year’s one, penalised by the unfavourable foreign exchange effect linked to the Russian and Ukrainian currencies. Consequently, for the full financial year 2014, Buzzi Unicem expects to report a recurring EBITDA growth above the previous year and slightly over €400 million.

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