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Titan Cement experiences positive 3Q14 in US and Greece

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World Cement,

The Greek Titan Group, a global cement player, has reported its results for the 9 months to the end of September. Growth in the US, an improvement in the company’s home market of Greece, and stability in Southeastern Europe contributed to an improvement in the Group’s results. However, Titan’s operations in Egypt suffered from a shortage of natural gas, leading the company to invest in the utilisation of solid and alternative fuels to resume normal production output from the end of 2014.

Group turnover grew by 2% in 3Q14, reaching €308 million. EBITDA was flat at €58 million, while net profit reached €28 million versus €7 million in 3Q13. Foreign exchange movements had a positive effect on results, particularly the strengthening of the US dollar and the Egyptian pound against the Euro. Foreign exchange gains contributed €21 million to third quarter net profit, as against a €4.5 million loss in 2013.

In the first nine months, Group turnover reached €880 million, a 3% increase compared to the same period in 2013, while EBITDA remained stable at €147 million. Group net profit, after minority interests and the provision for taxes, stood at €30.5 million versus a loss of €15 million in the same period in 2013.  Nine month net profit includes foreign exchange gains of €20 million, compared to a €13 million loss in 2013.

Note: The above 2013 figures are presented here restated as per the application of IFRS 11, according to which, the Group henceforth accounts for its activities in Turkey, conducted through its 50/50 JV, via the equity method [previously consolidated using the proportionate consolidation method]. 

Regional overview

Demand for building materials grew Greece, compared to the extremely low levels of 2013, as a result of public works, particularly the re-launch of major road works in the country. Residential construction, which traditionally drives demand, remains completely subdued. 

Total turnover for Group region Greece and Western Europe grew by 17% in the first nine months of the year, reaching €221 million. EBITDA grew to €29 million versus €13 million in the same period in 2013.

In the US, demand continued to recover – particularly in Florida where a significant part of the Group’s activities are based. Higher sales volumes and improved prices contributed to the revenue growth of Titan America, which in the nine month period reached €345 million, an increase of 13%. ????DA was up 37% at €32 million.

In Southeastern Europe, construction activity was essentially flat versus the previous year. Capacity utilisation rates for the Group’s plants remain low, but turnover grew by 1.5% and stood at €167 million while EBITDA reached €53 million, a 10% increase.

In Egypt, the market maintains its positive momentum and overall cement consumption exceeded that of the previous year. The repeated interruptions in the state-provided gas supply, coupled with the considerable administrative delays in the issuance of the required permits for the investments necessary to allow for the utilisation of solid fuels, which Titan had underway, led to a considerable loss of production. In order to meet the high cement demand until the fuel conversion process is complete, the Group has been importing and grinding clinker, at low profitability margins.

Turnover in Group region Eastern Mediterranean (Egypt) in the period January – September 2014 declined by 24% to €147 million. EBITDA declined by 48% compared to the same period in 2013 and stood at €32.5 million.

Cement demand in Turkey continued to grow at healthy rates. Profits for Turkey, which is consolidated by the equity method, were €3.9 million.

Taking advantage of the favourable conditions prevalent in financial markets during the course of the third quarter of the year, the Group through its subsidiary Titan Global Finance PLC issued a €300 million, five-year bond with an annual coupon of 4.25%. Funds raised were utilised for the repayment of existing debt.

At the end of September 2014, group net debt stood at €529 million, €34 million lower than the corresponding period the previous year and €20 million higher than the beginning of 2014, impacted by seasonality. Roughly 40% of gross Group debt is in the form of bonds, and the remainder from Greek and international banks in various countries. 

Capital expenditure in the nine month period reached €47 million versus €29 million the previous year, mostly directed to Egypt and the USA.

Outlook for the final quarter

Continued recovery is anticipated for the US and Greece, while construction activity in Southeastern Europe is expected to remain unchanged from last year. In Egypt, the continuing fuel projects will bring about self-sufficiency, but the results of those projects are unlikely to be seen until next year. In Turkey, cement demand continues to be high.

Adapted from press release by

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