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Vicat’s earnings hit, despite rising sales

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World Cement,

French building materials group, Vicat, reported earnings of €444 million in 2017, a 3.4% fall on a like for like basis on the previous year. The fall in earnings comes despite a 6.4% increase in like-for-like sales to €2.56 billion.

Earnings were particularly hit by a steep decline in Egyptian EBITDA, following the currency devaluation in November 2016, which halved the value of the Egyptian pound. This was only partly offset by a price rises. There was also a smaller fall in EBITDA from the company’s Turkish operations, where unfavourable weather conditions hit performance.

Despite the fall in the earnings, there were more positive signals towards the latter half of the year. EBITDA in 2H17 actually rose 4.5% on a like-for-like basis, compared to a 13% fall in the first six months of the year.

The company generated increased EBITDA in France, India, Kazakhstan, and the US – despite unfavourable weather conditions in the southeast. West African EBITDA was also stable, as strong sales of aggregates in Senegal and cement in Mauritania offset contractions in the cement businesses in Senegal and Mali.

Overall, the cement business contributed 51% of operational sales – a slight dip on the previous year. The Concrete & Aggregates business contributed 34.5%, an increase on 2016. Other Products & Services was roughly steady at 14.5%.

“Vicat posted a healthy performance in 2017 amid a very mixed environment,” said the company’s Chairman and CEO, Guy Sidos. “In spite of these headwinds, our businesses in France, Asia and the US made health progress.”

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