Italian cement major Italcementi’s first quarter results show a similar trend to the other European players – improving demand and the impact of exchange rate effects.
Positive progress is reported in Central Western Europe, while good performance was also seen in India and Thailand in the Asia region and in Egypt in North Africa. In North America, sales were impacted by the severe weather conditions.
Revenue for the quarter was €932.9 million, reflecting a 0.2% improvement in business performance and a marginal consolidation effect (+0.1%). The exchange rate effect had a negative impact of 3.6%, meaning overall revenue was down 3.3% y/y. Recurring EBITDA was up 8% at €95.5 million including a contingent negative effect arising from a change in inventories. Net of the material exchange rate effect, recurring EBITDA posted an improvement of around 13.5%. This was largely due to ongoing measures to contain operating expense. The most significant progress in recurring EBITDA was in Italy, Thailand and Spain, while the largest downturns were in North America, India and Egypt, with the exchange rate effect constituting a particularly negative factor.
The Group reported negative EBIT of €4.2 million (-€16.4 million in 1Q13) after amortization and depreciation of €98.9 million and impairment of €1.8 million. Increased finance costs led to a loss before tax of €44.2 million. The total loss for the quarter was €55.2 million, compared to a loss of €58.5 million in 1Q13. Net debt at 31 March 2014 was €2076.5 million, an increase of €142.4 million from 31 December 2014 but an improvement of €22 million from 31 March 2013. Consolidated equity at the end of 1Q14 was €3691.4 million, compared with €3783 million at 31 December 2014).
The outlook for the remainder of the year is good, considering the positive signs in Europe and a recovery in North America. Italcementi confirms its expectation of an improvement in full-year EBITDA compared with 2013 in the current circumstances.
Adapted from press release by Katherine Guenioui
Read the article online at: https://www.worldcement.com/europe-cis/09052014/italcementi_1q14_results_show_trend_of_improvement_in_western_europe_165/