TITAN CEMENT GROUP
2009 NINE MONTHS RESULTS
- 3rd Quarter EBITDA -2%
- Commissioning of new production line in Egypt
ΤΙΤΑΝ Group Turnover for the first nine months of 2009 reached €1,046.2 m., lower by 11.6% versus the prior year. EBITDA declined by 11.4% reaching €257.9 m. Net Profit for the Group, after minority interests and taxes reached €103.7 m., 36.5% lower compared to the same period last year.
The results were positively affected by the Dollar and Egyptian Pound appreciation versus the Euro. At constant exchange rates, Group turnover would have decreased by 14.4%, while EBITDA would have decreased by 12.6%.
The Group’s performance was negatively affected by the lasting, deep crisis of the construction sector in the USA, the continuing decline of demand for building materials in Greece and the downturn of markets in Southeastern Europe. This was only partially offset by the significant growth of the Egyptian market.
In the third quarter, operating profitability (EBITDA) showed a marginal decline of 2.1% compared to the same period last year. This was the outcome of cost containment initiatives at all levels across the Group and the positive effect of lower fuel prices, compared to the same period last year.
|€ m.||Q3 2009||Q3 2008||% change||9M 2009||9M 2008||% change|
|Net profit *||44.3||47.3||-6.30%||103.7||163.2||-36.50%|
|*after taxes and minority interest|
In Greece, deterioration of the general economic situation and excess housing inventory available in the market negatively affected building activity. In Greece and W.Europe, for the nine months of 2009, EBITDA reached €96 m., lower by 29% compared to the same period in 2008.
In the USA, demand for building materials continued to decline, reflecting the oversupply of houses in the market, the continuous decline of building permits issued, as well as the crisis of the non-residential market. Regarding public works, only a minimal portion of funds from the economic stimulus program have been disbursed so far, with a negligible effect on demand for building materials in our markets. Operating profitability (EBITDA) declined by 20% reaching € 28 m.
In Southeastern Europe, demand for building materials declined significantly in all regional markets. The construction of the new cement plant in Albania continues as scheduled. Concurrently, the Group is expanding its market presence in the region, in anticipation of the start up of the plant in the first quarter of 2010. Overall EBITDA in Southeastern Europe declined by 26% to € 61 m.
In the Eastern Mediterranean region, buoyant demand in Egypt, combined with the acquisitions made in 2008, led to a substantial improvement of financial results. In the first nine months, EBITDA increased by 91% to €72.5 m.
Adapting to the prevailing conditions, TITAN Group remains focused on generating positive cash flow by containing costs, reducing working capital needs and managing liquidity prudently. Selling, general and administrative expenses for the nine months of 2009, declined by 16%, compared to last year. At the same time, Group net debt was reduced by €85 m. compared to the end of 2008.
Results were adversely affected by increased financial expenses, due to higher debt levels and increased depreciation charges, further to the Group’s expansionary investments in 2008. Furthermore, the positive one-off tax impact of € 16m. which the Group recorded in 2008, affected the basis of comparison with the same period in 2009.
OUTLOOK FOR THE REMAINING OF 2009
In the context of the continuing economic crisis, the trends that prevailed in our markets in the first nine months are expected to remain essentially the same for the rest of the year. However, and despite this adverse framework, the Group remains focused on its values and strategic priorities.
In the USA, the Portland Cement Association recently revised downwards its forecasts for cement consumption in 2009, to -27%, while for 2010 the expected upturn was halved to 5%. It is expected that the economic stimulus program through auctioning of public infrastructure projects will not affect cement demand in the remaining of this year.
In Greece, the housing market is anticipated to remain weak, affecting negatively demand for building materials.
In Southeastern Europe, the negative trends in building activity are expected to continue in the context of a generalized economic recession in the region.
On the other hand, in Egypt, construction activity is expected to maintain its high growth pace. The new production line, with production capacity of 1.5 million tons cement per year, at the Beni Suef plant, was completed both on schedule and on budget. Commissioning started in November 2009, and the new line is already helping satisfy the growing demand.
Finally, in Turkey, cement supply is anticipated to exceed demand in the short term, keeping selling prices at low levels.
COMPANY FINANCIAL RESULTS
At parent company level, turnover reached €339.6 m., a decline of 19%, while EBITDA reached €88.5 m., 24% lower, reflecting the decline of the domestic market. Net profit after tax and minority interest decreased by 51% compared to the previous year reaching € 40.9 m.
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 2008, the Group sold over 17.2 m. tonnes of cement and cementitious materials, 5.4 m. m3 of ready mixed concrete, 18.6 m. tonnes of aggregates and various other building materials like concrete blocks, dry mortars etc.
Detailed financial and other information is available on the Titan Group website: www.titan-cement.com