TITAN Group reports financial results for 3Q18
Published by Lucy Stewardson,
Compared to 3Q17, TITAN Group has announced an improved performance, with turnover for the period increasing by 5% to €389.4 million. EBITDA was also reported to increase by 3.2%, to reach €74.7 million. After minority interests and the provision for taxes, net profit increased by 32.5% to €25.4 million. This is compared to a net profit of €19.2 million in 3Q17.
The company has also reported that its consolidated turnover for the nine month period stood at €1101.9 million, a 3.7% decline compared to 3Q17. EBITDA for the nine month period also decreased by 8.2%, standing at €196.9 million. For this period net profit after minority interests and the provision for taxes was reported to increase by 51.8% to €50.2 million.
Despite wet weather in the US, it has been reported that demand for cement continued its upward trend, providing a supportive backdrop for price increases. Turnover for 3Q18 improved by 6.6% and EBITDA increased by 2.8%. Turnover for the nine months recorded a 4.2% decline to reach €639.3 million (although in US dollars, turnover recorded a 2.7% increase), while EBITDA stood at €127.9 million, a 7.9% decrease.
The Group has also reported that building activity in Greece remains low, although it has seen positive trends in areas driven by growth in tourism. Modest growth in domestic sales were recorded for 3Q18. In addition, the company has reported that operating costs throughout 2018 have been impacted by higher energy costs, which could not be passed on through higher pricing.
Exports have remained strong, with the US representing the Group’s biggest export market. It has been reported that turnover declined by 3.1% to €58.9 million in the Group’s Greece and Western European region. In the nine months a 8.7% decline was recorded, reaching €173.4 million. For 3Q18, EBITDA declined by 18.8%, standing at €5.4 million (for the nine months this was a 47.7% decline to €10.7 million).
Demand in the Group’s Southeastern European markets increased for 3Q18. Turnover increased for the quarter by 10.4%, reaching €72.1 million. EBITDA for 3Q18 reached €20.5 million, recording a marginal decline or 0.3% (for the nine months EBITDA decreased by 0.6% to €44.5 million).
Cement demand in Egypt was at similar levels to those recorded in 2017. Following the entry of new capacity in the market during 2Q18, competition intensified. Prices did improve, however, compared to low levels recorded in 2017. Margins have been eroded by a spike in electricity costs, alongside additional levies applied to each tonne of cement produced. Turnover in the Eastern Mediterranean remained essentially flat at €33.5 million for 3Q18 and EBITDA reached €1.1 million, compared to losses of €1.3 million in 2017.
In the shadow of the rapid deteroriation of the macroeconomic situation in Turkey, the construction sector witnessed an abrupt slowdown in 3Q18. The Turkish lira’s 53% decline against the euro in the nine months, as well as an increase in energy costs, have both negatively affected Adocim results.
The Group has reported that demand in Brazil has been showing encouraging signs in 2018.
Capital expenditure for the group for the nine months stood at €77 million, which is €14 million less than for the nine months in 2017. Free operating cash flow stood at €62 million, €10 million higher compared to the nine months of 2017. The Group has stated that this reflects lower EBITDA levels, lower capital expenditure, and lower working capital requirements. At the end of 3Q18, the Group’s net debt stood at €784 million, an increase of €26 million compared to net debt at the end of 3Q17.
In terms of outlook, the Group has stated that its outlook for the US construction sector remains positive, the Portland Cement Association having recently confirmed its estimates for an increase in demand between 2018 and 2023. The Group also expects the restart of major projects in Greece, which would energise the construction sector, though this is not expected before the end of 2018.
The Group has reported mild, longer-term growth expectations for Southeastern Europe, with its plants currently operating at levels below their normal capacity. It is expected that demand for cement in Turkey will continue to reduce, while it is predicted that the conclusion of the pre-election period in Brazil will mark the advent of a new growth cycle in the cement market.
TITAN Group is an independent, vertically integrated cement and building materials producer.
Read the article online at: https://www.worldcement.com/the-americas/14112018/titan-group-reports-financial-results-for-3q18/
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