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TITAN Cement shares financial results

Published by , Deputy Editor
World Cement,

Sales volume trends were positive in all product lines in the first half of the year. Group cement and clinker sales, including exports, increased by 11% supported by higher demand across most markets. Aggregates and ready-mix sales volumes increased by 4% and 5% respectively.

Consolidated revenue reached €821.1 million, up 4.4% versus the first half of 2020, reflecting growing demand in most markets and a supportive pricing environment. Top line growth was held back by weaker US$ and US$-linked currencies. In local currencies, growth was 11.7%. EBITDA reached €142.6 million, up 4.2% (and +10.3% in local currencies), held back by the spike in energy costs and freight rates. Net profit after taxes and minority interests more than doubled reaching €58.0 million vs €22.4 million aided by a significant decline in finance costs. To put those figures in context, it should be noted that - as most of the Group’s countries of operation were not among those hard hit in the early days of the pandemic – H1 2020 had been resilient and ahead of H1 2019.

Financing and investments

Group operating free cash flow reached €60.5 million, a decrease of €8.4 million compared to the first half of 2020. Cash flow generation benefited from higher EBITDA levels, but capital expenditure was €54.3 million, increased by €13.8 million compared to the Covid restrained capex in 2020.

Net finance costs in the first half of 2021 were lower by €16.4 million and came to €15.7 million. This partly reflects lower debt balances and lower interest rates charged, as well as a positive variance vs last year’s one-off €7 million mark to market losses on US$ interest rate hedges.

Group net debt at the end of the first half of 2021 was €691.4 million, higher by €7 million from the end of 2020. Cash balances were reduced to €93.7 million, after repayment of €166 million for matured bonds in June 2021.

On 23 March 2021 the Board of Directors decided the return of capital of €0.40 per share to all shareholders of the company on record on 29 April 2021 which was paid on 02 July 2021.

On 22 June 2021 the process for the cancellation of 5% of TCI’s shares was completed. Following this transaction, the share capital of the company amounts to €1 159 347 807.86 and is represented by 78 325 475 shares. On 30 June, 2021 TITAN Cement Group owned 1 307 520 own shares representing 1.67% of total voting rights.

Financial Results of the second quarter of 2021

Trading in the second quarter provided further evidence of the positive effect of improving market fundamentals, returning confidence and pent-up demand. As was mentioned at the announcement of Q1 2021 results, on a comparable basis Q2 2021 EBITDA would be about €10 million higher to account for the estimated maintenance cost deferred to Q2 in the current year.

Group consolidated revenue for the second quarter of 2021, reached €450.3 million, a 12.2% increase over the second quarter of 2020. EBITDA declined by 10.1% mainly due to the deferral of maintenance shutdown and related costs at the Pennsuco plant in the US to Q2 2021 vs Q1 in 2020, but also due to cost headwinds related to rising energy and freight prices impacting different geographies. Net Profit after Tax (NPAT) for the quarter reached €42.7 million versus €38.2 million in the second quarter of 2020.

ESG Performance review

TITAN has made a good start towards its new Environmental, Social, and Governance (ESG) targets for 2025 and beyond, which were released earlier in the year and focus on four pillars, defined as material by its stakeholders: decarbonisation and digitalisation; growth-enabling work environment; positive local impact; and responsible sourcing, all underpinned by good governance, transparency and business ethics.

The Science Based Targets initiative (SBTi) validated the Group’s Scope 1 and 2 CO2 emissions reduction targets for 2030 as consistent with levels required to meet the goals of the COP21 Paris Agreement and keep warming to well below 2°C. TITAN is one of the first cement companies worldwide with decarbonisation targets set and validated by the SBTi, a partnership between the Carbon Disclosure Project (CDP), the United Nations Global Compact, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). TITAN is now also monitoring Scope 3 CO2 emissions from the supply chain across all cement operations. Emissions generated from the transportation and distribution of the Group's products in 2020 were verified by an external auditor.

TITAN continued to implement energy efficiency and zero waste management systems across its operations. Following the certification of the two plants in Egypt, 82% of the Group's production is now certified according to the ISO 50001 Energy Management System or covered by energy audits. Moreover, the highest Platinum rating (Zero Waste) under Eurocert's ‘Zero Waste to Landfill’ standard was awarded to all of TITAN's cement plants in Greece. With the plants in the USA and Turkey having received similar certifications, the Group has now over 50% of its production certified for ‘Zero Waste to Landfill.’

Positive local impact and community engagement remained an area of focus. The Group's subsidiary in North Macedonia received an Accolade at the country's ‘Sustainable Development Goals (SDG) Pioneer’ awards, organised by the UN Global Compact Network and the civil association, Konekt, in acknowledgment of its initiatives towards good health and well-being (SDG 3), quality education (SDG 4), and climate change (SDG 13). In Greece, TITAN celebrated the planting of over 2 000 000 trees since the launch of its environmental restoration and tree-planting programme in 1971. The Group's efforts in biodiversity, preservation of natural resources, and sustainability were also recognised at the 2021 Bravo Sustainability Awards, hosted by the QualityNet Foundation, where TITAN received two awards, one for its new ESG targets and one for the establishment of the first Phenological Garden in Greece, in partnership with Aristotle University of Thessaloniki.

Recognising the continuous improvement of TITAN’s ESG performance more broadly, MSCI upgraded the Group's ESG rating to AA.

The Fit for 55 proposal, a broad legislative package aiming to align EU policy with the new CO2 emissions reduction goal of 55% by 2030, was released by the European Commission on 14 July, entering a consultation phase with the European Parliament and Member states, which is expected to be concluded in the second half of 2022. Its final form is not yet clear and it is not expected to have a direct impact on our operations in EU member countries, Greece and Bulgaria, for the next few years.


Construction activity has proved resilient to the challenging circumstances posed by COVID. With the worst of the global pandemic hopefully behind us, market fundamentals and the key drivers of demand are in place to support growth in 2021 and beyond. At the same time, operating profitability is held back by the spike in energy and freight costs, as well as by broader supply bottlenecks, in part a reflection of the sudden buoyancy of activity.

In the US, housing and infrastructure spending should continue to drive demand growth. Titan America backlogs are strong and growing. At the same time, labour shortages, logistics bottlenecks and growing input costs are impacting the entire value chain.

In Greece, demand is also on a growth path, driven by the recovery in housing in the key urban centres along with the many peripheral infrastructure projects across the country. The Greek market pick-up has so far taken place without any volumes being yet absorbed by the major planned infrastructure projects. These are expected to enhance consumption levels towards the end of the year and into 2022, laying the foundations for growth in the years ahead. The Group will continue to leverage its international trading network so as to optimise supply-demand dynamics across its geographic footprint. The tightness of global freight markets at present however and the attendant surge in freight rates, will challenge the profitability of this activity, as long as such conditions persist.

In Southeastern Europe, momentum in the sector is set to continue. A mix of residential, private commercial/industrial as well as infrastructure projects provide the varying backdrop of demand across the different countries in our cluster of operations. Macroeconomic conditions remain supportive with investment flowing into the region.

In Egypt, the recently (as of 01 July) imposed production quotas by the authorities, applicable to all cement producers, aim to address the long-standing structural imbalance in the country. While it is too early to gauge their full impact, the more favourable demand-supply balance seems to providing support for an improvement in prices. Coupled with improving macroeconomic prospects and recovering cement demand, this should lead to improved operating performance.

In Turkey, supportive government policies seem set to continue driving construction demand growth despite the precarious, state of the economy.

In Brazil, the National Union of Cement Industry expects that in 2021 cement demand will increase by 6% compared to 2020 levels with home renovations and new construction projects driving demand. Both consumer and construction confidence indices are increasing, reflective of both the activity in the residential housing market and public investment in infrastructure, generating good prospects for the industry into 2022.

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