Ciments Français posts fall in operating results

Ciments Français (Italcementi Group), has announced a 3.8% fall in consolidated revenues in 2011 to €3886.3 million (-1.4% at comparable consolidation scope and exchange rates). The results were attributed to a fall in demand due to a worsening economic crisis in 2011, as well as strong inflation on fuel prices and negative translation effect. These impacts were only mitigated in part by efficiency measures implemented in 2011.

The Group’s cement sales volumes for the entire year were down 1.4% at 42.4 million t, while aggregates sales fell 5.2% to 34.8 million t. Ready mix concrete sales volumes were up 1.9% at 9.7 million cubic m. Cement sales improved in France, North America, Morocco and India but decreased in Egypt due to the crisis.

Recurring EBITDA amounted to €702.4 million as of 31 December 2011, down 20.2%. EBIT dropped by 37.9% at €309.3 million, after recognition of €358.6 million in depreciations and €53.4 million in impairment losses, mainly in Spain and Greece.

The Group’s net consolidated profit fell 13.7% to €274.2 million, following recognition of €50.7 million in net interest expense, (down 23.6%, as against €66.5 million at the end of December 2010), €20.1 million in profit from associates (+9.6%) and €111.4 million in tax expense (-1.5%).

The share of profit attributable to owners of Group parent was €215.3 million (+6.4%), while the share attributable to non-controlling (minority) interests (mainly in Egypt and Morocco) was pushed down to €59 million (-49%).

Group investments in industrial and intangible assets amounted to €300.9 million as of 31 December 2011, down 25.6% on 31 December 2010. They mainly related to the strengthening of the production tool in France/Belgium and Egypt, and the increase of production capacity in India and Morocco.

A tight management of cash flows, the disposal of assets in Turkey and the sale of Axim contributed to strengthen the net financial position. At the end of December 2011, net financial debt was reduced by €390.1 million at €1021.4 million, as against €1411.6 million as of 31 December 2010.

Total equity was €4257.7 million. The gearing ratio (net debt/equity) was 24% compared to 33.1% at the end of December 2010.

Ciments Français SA posted a net profit of €296.3 million (€147.5 million in 2010).

Q4 2011

During the fourth quarter of 2011, Group cement sales volumes were down 1.7% at 10.2 million t. Aggregates and ready mix concrete volumes increased slightly: +0.3% at 8 million t for aggregates and +0.1% at 2.3 million cubic m for ready mix concrete.

Q4 revenue fell 3.9% to €903.2 million, while recurring was down 34.4% to €139.3 million euros.

Outlook

The Group expects the markets in which it operates to be more stable in 2012. Sales volumes are expected to stabilise at a level similar to that of 2011, increasing in North America and Morocco while declining in Southern Europe. Egypt remains a source of uncertainty. Prices are likely to trend more positively and partially offset the rise in energy costs and the impact of inflation on fixed costs. Additionally, the efficiency programmes launched in 2011 should contribute to increase operating results in 2012.

The Group will initiate a new cycle of investments this year related to its industrial facilities, mainly in India (Gulbarga) and Bulgaria. In Morocco, the Group expects a new expansion phase after the commissioning of the Ait Baha plant. Investments should be largely financed with the use of internal resources and net debt position should remain stable all through the year.

Read the article online at: https://www.worldcement.com/europe-cis/05032012/ciments_fran%C3%A7ais_posts_fall_in_operating_results/