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Cimpor releases first half results

World Cement,


In spite of some good regional performances in the first half of 2012. In Mozambique and Brazil, for example, Cimpor’s activity was hit by the still worsening economic situation on the Iberian peninsula, not to mention the ongoing difficulties of market conditions in China. Turkey’s harsh winter, a depreciation of the Brazilian real, non-recurring costs associated to reorganizations and indemnities, and the low price of CO2 on international markets also had a detrimental impact on the company’s results. The upshot of this was that the company’s EBITDA for the first half fell 15.3% y/y to €267.4 million.


Overall, the company’s combined cement and clinker sales in the first half of 2012 totalled 12.9 million t, 6.3% less than in the same period of 2011. The second quarter alone saw sales of 7.1 million t, but that is still down 4.8% on the same period last year. In China and Spain, the company saw a drop in sales, but even in spite of the poor Turkish winter, it saw a slight growth there on the same period in 2011. Increased sales were posted in Brazil and Mozambique, due to a growth in demand in both regions, but these were still not enough to offset the aforementioned declines. It is also worth noting the company’s increased half-year sales in Egypt, Portugal (due to exports) and India. In Tunisia, South Africa and Cape Verde though, lower sales volumes were recorded.

The balance

Cimpor’s Net Assets on 30 June 2012 totalled €4 896 million, 6.5% less than on 31 December 2011. This is mainly due to recognition of impairments in the Iberia and the Brazilian Real’s depreciation against the euro.

Net operating investments totalled €114.1 million in the first half of the year. Besides acquisition of the ship Souselas, which replaced the Niebla, investments associated with increased capacity in Brazil stand out, specifically the new Caxitu plant and installation of a third clinker production line in Cezarina.

On 30 June 2012, the company’s Net Financial Debt was €1 537 million, €85 million less than at end 2011, due to the fact that the company has chosen to defer dividend payment for the year 2011 until later in August.


The situation in Iberia is expected to continue to be impacted by the Portuguese Government’s budget consolidation efforts in the wake of the financial crisis. In Brazil, it is foreseeable that despite some economic slowing, the upcoming Football World Cup and Olympic Games, as well as a series of infrastructure improvement programmes will continue to sustain increased cement demands. In the Mediterranean Rim region, it is expected that growth in Turkey may re-approach the pace shown in 2011, and that the Egyptian and Tunisian markets can maintain strong growth rates as well. In Morocco, after strong first quarter growth, forecasts indicate a year of slight growth to follow. In Southern Africa, no major differences are expected in the second half of the year. Moderate growth is expected to continue in South Africa, and Mozambique’s dynamic economy is likely to sustain current high growth rates there. Finally Asia – while the monsoon season may slow demand somewhat in India, with some price degradation; for the time being there are no signs of an impending improvement in market conditions in China.


In spite of the the €2.5 billion takeover of Cimpor last month by Brazil’s Camargo Correa SA, the company does not expect the second half of 2012 to be any better than the first. The ongoing uncertainty about the Eurozone sovereign debt crisis (specifically concerning the situation in Greece and more recently Spain) and the tendency for moderated growth in some key emerging economies are likely to be key factors impeding any short-term improvement.

Adapted from press release by Jack Davidson.

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