Ciment Français sees improved Q2 after slow Q1

During the first six months of 2010, Group sales volumes dropped in cement and clinker and aggregates, but increased slightly in ready mix concrete.

After a first quarter characterised by a significant decline in sales volumes with particularly bad weather conditions, the second quarter of 2010 saw an increase in sales volumes in all business segments compared with the second quarter of 2009 (in particular +3.6% for cement and clinker activities).

Over the six-month period as a whole, the Group managed to almost entirely make up for the decrease in the first quarter with sales volumes amounting to 23.1 million t in cement and clinker (-0.3%), 19.2 million t in aggregates (-4.0%) and 5.7 million m3 in ready mix concrete (+1.8%). Cement and clinker sales volumes improved in all emerging countries, with the sole exception of Bulgaria; they were down in all the industrialised countries and more particularly in Spain. In ready mix concrete, sales volumes increased significantly specially in Turkey, Thailand and Kuwait.

The minor changes in volumes came along with a downward trend in prices in some difficult markets in Q2 as well as in Q1, in particular in India, Bulgaria, the United Sates and Turkey; in the other emerging countries, the price trend remained globally positive especially in Kazakhstan, Egypt and Morocco.

Group H1 consolidated revenues amounted to €2132.8 million, down 1.9% (-3.1% at comparable exchange rate and consolidation scope) on H1 2009. The increase in the revenues of all the emerging countries (except Bulgaria and India) almost completely made up for the decline in North America and Western Europe.

Recurring EBITDA for H1 totaled €437.5 million (-5.3%), of which €297.4 million in Q2 (+9.4%), i.e. a margin on revenues of 24.7% (+1.0%) for the quarter following operating efforts and the sale of CO2 emission rights for €20.2 million. EBIT amounted to €252.9 million in H1 (-4.5%).

After net finance costs of €32.6 million down 22.9% on H1 2009, the share of results from associates and a tax expense of €61.7 million (-0.4%), net consolidated Group profit amounted to €166.9 million, up 0.6%. The share of profit attributable to equity owners of the parent totaled €103.1 million (-9.3%), while the share attributable to minorities (Egypt, Morocco and Thailand) amounted to €63.8 million (+22.2%).

Total Group investments in industrial and financial fixed assets over the first six months of 2010 added up to €219.0 million as against €327.2 million in H1 2009.

The optimisation of working capital requirements contributed to keep a similar indebtedness level to that at the end of 2009: net financial debt as of June 30, 2010 amounted to €1589.4 million as against €1562.3 million as of December 31, 2009.

After payment by Ciments Français SA of €108.7 million in dividends, total equity amounted to €4327.6 million compared to €3896.5 million at the end of December 2009. The debt to equity ratio (net financial debt/total equity) was 36.7% as against 40.1% as of December 31, 2009.

Outlook

The improvement in volumes in Q2 should continue in H2 with an ongoing pressure on sales prices. With the pursuit of the efforts towards productivity started since the end of 2008, H2 2010 operating results should be comparable to those of 2009.

Read the article online at: https://www.worldcement.com/europe-cis/30072010/ciment_fran%C3%A7ais_sees_improved_q2_after_slow_q1/