FINANCIAL RESULTS
Titan Group Turnover for the first nine months of 2008 reached € 1,184 m, up by 3.5% versus the prior year. EBITDA was € 289 m, down 15.4% against the previous year. Net Profit for the Group, after minority interests and taxes reached € 163 m, 15.6% lower.
The increase of turnover was exclusively due to the consolidation of the recent acquisitions in Egypt and Turkey. The lower financial results are primarily due to the deep crisis in the US housing market and the rise in fuel and electricity prices.
The results for nine months of 2008 were negatively affected by the Euro’s continued strong performance against the US Dollar and Egyptian Pound. At fixed exchange rates, Group turnover would have risen by 7.8 % and EBITDA would have dropped by 13.6 %.
| €m | Q3 2008 | Q3 2007 | % change | 9Μ 2008 | 9Μ 2007 | % change |
|---|---|---|---|---|---|---|
| Turnover | 418 | 386 | 8.30% | 1,184 | 1,144 | 3.50% |
| EBITDA | 98 | 120 | -18.10% | 289 | 342 | -15.40% |
| Pre-tax profits | 57 | 86 | -33.90% | 179 | 248 | -27.70% |
| Net profit* | 47 | 69 | -31.30% | 163 | 193 | -15.60% |
| *after taxes and minority interest | ||||||
The particularly low tax burden in the period is due to the proportionately lower participation in group profitability of countries with high tax rates, as well as to one-off events.
In Greece the demand for construction materials declined moderately compared to the first nine months of 2007. EBITDA reached € 134 m, down by 12.0% versus the previous year, in large part due to rising energy prices.
In the USA, the housing market deteriorated further and resulted in sharply lower volumes across the board. Operating profitability dropped by 61% and reached € 35 m.
In Southeastern Europe, demand continued to increase, albeit at a slower pace. Energy costs affected the Group’s profitability; despite the increased sales by 34.5%. EBITDA was up by 8.6%, reaching € 83 m.
Finally, in the Eastern Mediterranean region, the acquisitions in Egypt and Turkey contributed significantly to improved results, with EBITDA up by 64.4% at € 38 m. The positive impact of Egypt’s market was partially mitigated by the increasing energy costs. Despite the difficult Turkish market the recently acquired plant had a positive contribution.
BUSINESS DEVELOPMENT
During the first nine months of 2008, the group invested € 609 m for business development and modernisation. Capex reached € 139 m, while acquisition spending was €470 m.
More specifically, after the acquisitions in Egypt and Turkey, during the second quarter, which increased the annual production capacity by 2.5 m MT, the group continues with two important projects which involve the construction of a new plant in Albania (with a production capacity of 1.5 million tonnes per year), and the construction of an additional new production line at the Beni Suef plant in Egypt (also with a production capacity of 1.5 million tonnes) both of which are expected to be completed at the end of 2009. Following the completion of these investments group’s cement production capacity will be 35% above 2007 levels.
The above important investments, which were made during the 1st half of 2008, resulted in an increase in group net debt from €569 m to €1,133 m.
PROSPECTS FOR THE REMAINING OF 2008
Visibility, in the short term, has been significantly reduced as a result of global credit market developments. It is anticipated, however, that demand for building materials will be negatively affected by the resulting global economic slowdown.
For the remainder of 2008 demand in Greece is expected to continue to decline versus the previous year, as tighter liquidity and a high housing inventory weigh on construction activity.
In the USA the Portland Cement Association (PCA) predicts a further reduction in cement consumption by 12% for the current year, while there are no signs of improvement in the immediate future.
Market conditions in the Group’s emerging markets are not expected to be materially different in the remainder of the year.
COMPANY FINANCIAL RESULTS
At parent company level, turnover reached € 418m 4.4% up, while EBITDA reached €115m, 10.9% lower. Net profit after tax and minorities weakened by 8.0% to €84m. With a view to long term value creation for its shareholders, Titan bought back, during the first nine months of 2008, 2,075,929 own shares, at a total cost of €56m.
Titan is an independent cement and building materials producer with over 100 years of industry experience. Based in Greece, the Group operates in 7 countries, owning 12 cement plants. Throughout its history Titan has aimed to combine operational excellence with respect for people, society and the environment.
In 2007, the Group sold over 15.5 m. tonnes of cement and cementitious materials, 5.9 m. m3 of ready mixed concrete, 20 m. tonnes of aggregates and various other building materials like concrete blocks, dry mortars etc.
Detailed financial and other information is available on Titan Group website: www.titan-cement.com