Italcementi has reported first half cement sales for 2015 in line with 1H14. Cement sales prices were lower in Egypt and parts of Europe, but more positive in North America, India and Morocco. Thanks to a positive exchange rate effect, revenue was up 5.8% y/y at €2167.5 million. On a like-for-like basis, revenue slowed 2.1%.
Operating results improved, especially in the second quarter. Compared with 1H14, there was an increase in recurring EBITDA of 5.3% to €324.5 million and in EBIT of 9.6% to €113.0 million. This progress reflected the impact of a significant reduction in overheads and efficiency measures (totalling more than €52 million), income from carbon emission rights and the positive exchange-rate effect due to the appreciation of other currencies against the euro.
Operating expense in particular benefited from the efficiencies delivered by the new production lines, which gradually went into operation in the first half of the year, by the diversification of energy sources in Egypt and by the continuous reduction in overheads in Europe.
Profit for 1H15 was €3.8 million, compared with a loss of €79.6 million in 1H14. Cash flow from operating activities was up by €35 million y/y and covered the capex requirement of the first half in full. Total debt increased to €2237.6 million (a q/q decrease of €106.3 million), attributed largely to dividends paid and translation differences.
Italcementi expects a moderate improvement in full-year operating results. The strengthening of profitability on the Asian markets and the positive price dynamic on the Italian market and in North America should counterbalance the negative effects of competitive pressures in Egypt – which are nevertheless easing – and the continued weakness expected on the French market. An improvement is expected in Group leverage compared with last year, given the modest increase in debt.
Adapted from press release by Katherine Guenioui
Read the article online at: https://www.worldcement.com/europe-cis/31072015/italcementi-reports-stable-1h15-243/
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