Exposure to the slowdown of the Chinese economy, which was greater than expected, led to a downward revision of the prospects for global growth of the current year. The slowdown had a negative impact on raw materials prices and on international trade dynamics. In the Eurozone, business improved during the summer months, following expectations, with a sharp acceleration in exports and simultaneous slowdown in imports. Stimulus from consumption was partially offset by a decrease in investment, particularly in construction.
During 3Q15, the pace of growth in the construction sector was satisfactory in the US, Poland, the Czech Republic and Luxembourg. In Russia, however, a slowdown was registered, and Italy and Germany also noticed difficulties.
In January-September 2015, Buzzi Unicem’s cement and clinker sales totalled 19.2 million t, which is 1.3% more than in the previous year. Favourable conditions for these commodities were recorded in the US, Poland, Russia and the Czech Republic, but the central European market remained subdued.
Ready-mix concrete sales decreased by 2.3%, from 8.9 million m3 in 2014. This decrease was predominantly influenced by continued decline in Germany and the US, despite higher production in the Netherlands, Luxembourg, Poland, the Czech Republic and Italy.
Consolidated net sales increased by 5.2%, from €1898.7 million, to €1998.1 million. EBITDA increased by 16.4%, from €352.1 million. The figure at nine months was penalised by €3.2 million non-recurring costs. After this, along with depreciation, amortisation and impairment charges of €145.2 million, EBITDA amounted to €206.9 million. Net finance costs increased from €50.7 million to €83.7 million, of which €28.3 million referred to non-cash items. Including equity-accounted associated and gains on sale of investment, the profit before tax for the first nine months of 2015 came in at €178.9 million, compared to €120.3 million for the same period in 2014.
The trend of the first nine months of 2015 largely reflected predictions from the first half of the year. Although the decrease in the demand for cement and ready-mix concrete in Italy is unlikely to recover quickly, Central Europe as a whole should end the year with operating results which are in line with those from 2014. This reflects trading conditions that are more static than was expected when the year began. It is estimated that the market in Poland and the Czech Republic will continue to be favourable during the final quarter. In Russia, cement demand has been affected by the difficult economic situation and it is expected that operating results will be lower than in 2014. In the US it is anticipated that volumes will remain at a satisfactory level through to the end of the year.
Adapted from press release by Rebecca Bowden
Read the article online at: https://www.worldcement.com/europe-cis/11112015/buzzi-unicem-interim-results-956/