Vicat reports largely positive 1H14 results

Vicat’s first half results reflect the same foreign exchange struggles as its fellow European cement companies. However, overall, the January – June period saw increased volumes and higher sales at constant scope and exchange rates. Consolidated sales for 1H14 reached €1218 million, an increase of 6.1% y/y or 10.8% at constant scope and exchange rates. In the cement business, consolidated sales were up 17.1% at constant scope and exchange rates. Consolidated EBITDA was €208 million, up 3.1% y/y or 8.8% at constant scope and exchange rates. The impact of unfavourable exchange rates amounted to nearly €11 million over 1H14.

Geographical highlights

• India: sales totalled €113 million, up 49% at constant scope and exchange rates, reflecting revenue growth of 71.7% in 2Q14, up from 27.2% in 1Q14. Volumes increased by 51.8% y/y, reaching 2.5 million t. While selling prices were volatile, post-election prices seem to be rising again.
• Egypt: sales were up 40.6% at constant scope and exchange rates, at €61.8 million, thanks to an improving security situation  and a fast-growing market. Sales growth rose 26.7% in 1Q14 and 53.5% in 2Q14, while EBITDA rose by 96.6%.
• USA: the cement business saw consolidated sales grow by 19.1% and volumes rose more than 12% in 1H14. Selling prices were higher than in 1H13 and overall EBITDA from this business area rose to €0.3 million from a €0.3 million loss in 1H13.

In other regions, performance was less positive, with Switzerland struggling with an unfavourable 2Q13 comparison and Italy continuing to battle with a stalling economy. The depreciation of the Kazakh currency impacted results there and weaker prices affected EBITDA in Western Africa. In France, consolidated sales grew 1.5% at constant scope and exchange rates to €437 million, but EBITDA was down 10.2% due to below-average sales prices and a temporary increase in some costs and expenses.

In all, the cement business achieved operational sales growth of 7.2% in 1H14, or 14.4% at constant scope and exchange rates. Selling prices were more or less stable, with price increases in Egypt, Turkey and the US offsetting the small decline in France and Switzerland and greater decrease in West Africa, Kazakhstan and Italy. Cement volumes increased 15% overall and EBITDA was 12.7% higher at constant scope and exchange rates.

Outlook

Expectations for the full year and largely on the same track as the first half:

• France’s recovery is expected to continue at a slow pace.
• Italy is likely to remain weak.
• Switzerland will be impacted by the high basis of comparison with 2013.
• In the US, volumes will rise, as will sales prices.
• Performance should improve in Turkey, though at a slower pace than in the past.
• Improving security and macroeconomic factors will see a rise in volumes and prices in Egypt.
• Consumption is likely to remain strong in West Africa, though the trend will depend on the potential arrival of a new competitor.
• Expectations are high for India, where renewed growth following the elections is likely to stimulate demand.
• Kazakhstan is poised for growth. The group benefits from an ideal location and a highly effective production base.

Adapted from press release by Katherine Guenioui

Read the article online at: https://www.worldcement.com/europe-cis/05082014/vicat-reports-largely-positive-1h14-results-238/