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Italcementi Group - Board of Directors examines consolidated Results at June 30, 2014(ENP Newswire Via Acquire Media NewsEdge) ENP Newswire - 01 August 2014 Release date- 31072014 - Bergamo - The Italcementi Board of Directors examined and approved the half-year financial report as at and for the year to June 30, 2014. After a second quarter that proved slower than the first three months, the first half of 2014 reported cement sales substantially in line with the first half of 2013, while volumes of ready mixed concrete and aggregates - mostly on the mature markets - were down against a background of persistent stagnation in the construction industry. Despite this dynamic, thanks in part to the positive results from efficiency measures, which generated savings of approximately 20 million euro, the Italcementi Group reported an improvement in the first-half EBITDA margin to 14.8% (13.6% in the year-earlier period). 'Our results at the end of the first half are in line with our programs,' said Group CEO Carlo Pesenti. 'We continue to focus on containing production costs and on maintaining a solid financial position, partly in connection with commitments to complete our strategic projects, primarily in Italy and Bulgaria. The situation at the half-year stage and the projects we have planned, including the total success of the plan to strengthen the Group's capital position and simplify its governance through which we have acquired full control of Ciments Francais, mean we can confirm our expectation of an improvement in full-year EBITDA.' Considering performance in sales and sales prices - which had a positive overall effect, largely thanks to Egypt (which reported sharp increases in energy costs) and Thailand first-half revenue totaled 2,048.4 million euro (-5.0%). Net of the exchange-rate effect and on a like-for-like basis, the reduction was down to 1.8%. Operating results to the end of June reflected an improvement from the first half of 2013, while second-quarter operating results were substantially in line with the year-earlier period. Recurring EBITDA for the first half of 2014 was 304.8 million euro, an improvement of 2.2% (+1.9% at constant exchange rates and excluding CO2 emission rights), with the most significant progress reported in Italy and Thailand, while France Belgium, North America and India showed the largest decreases. After a long negative period, Spain and Greece reported a turnaround with positive results. After a reduction in non-recurring expense and lower amortization and depreciation compared with the year-earlier period, EBIT was 99.8 million euro, an increase of 27.7%. The loss for the period of 79.6 million euro (a loss of 43.1 million euro for the first half of 2013) reflected a sharp increase (approximately 48 million euro) in finance costs and impairment losses on financial assets. Cash flows in the first half showed an increase of approximately 4% in cash flow from operating activities to 179 million euro, and were significantly influenced by the extraordinary transactions launched in the first half (share capital increase), which were completed only in July with the close of the public tender offer for Ciments Francais shares. The carrying amount for net debt at June 30 was 1,851.7 million euro (down 82.3 million euro from the end of December 2013). Taking account of commitments to complete the Group's strategic investments and accounting for the entire 'i.150' operation in the first half, proforma debt would show an increase of approximately 138 million euro from the end of 2013. Outlook - The Group feels able to confirm that, largely thanks to the performance expected in the final months of the year, it will report growth in full-year recurring EBITDA compared with the figure for the year ended December 31, 2013. In the first six months of 2014, consolidated cement and clinker sales were substantially steady at 21.7 million metric tons, despite a slowdown in the second quarter. Central Western Europe reported a small increase in sales, thanks to performance improvements in Spain and Greece offsetting the downturns in France-Belgium and Italy, while the North American market continued to reflect the impact of the severe weather conditions of the early part of the year. Among the emerging countries, Egypt, India and Thailand reported sales growth of between 4 and 5%. In aggregates, sales totaled 15.4 million metric tons (-6.3%), with a general slowdown in all countries, with the exception of Italy and Greece. In ready mixed concrete, the decrease in sales volumes (-8.1% to 5.7 million cubic meters) was generated largely by reductions in Central Western Europe and Morocco. Revenue, at 2,048.4 million euro, was down 5.0% on the first half of 2013, due to slower business performance (-1.8%) and a negative exchange-rate effect (-3.3%), with a marginally positive consolidation effect (+0.1%). Revenue reflected the fall in sales volumes, whose impact was nonetheless mitigated by a positive dynamic in sales prices, mainly in Egypt (where the sharp increases in energy costs had an impact on sales prices) and Thailand. Recurring EBITDA was 304.8 million euro, an improvement of 2.2% benefitting from the sales price factor and income from CO2 emission rights, which counterbalanced the unfavorable exchange-rate effect. After net non-recurring expense of 1.9 million euro, EBITDA was 302.9 million euro (+3.3%). EBIT was 99.8 million euro, an improvement of 27.7% on the year-earlier period. Despite the impact of the trend in sales volumes and the exchange-rate effect (approximately 11 million euro), operating results improved thanks to the sales price effect, the significant containment of operating expense (for approximately 20 million euro overall) and income from CO2 emission rights transactions. Even excluding the CO2 factor and the exchange-rate effect, recurring EBITDA showed an improvement of about 1.9%, with the most important progress in Italy and Thailand, and the largest reductions in France-Belgium, North America and India. Increases were posted in net finance costs (75.1 million euro from 45.1 million euro in the first half of 2013, largely as a result of higher costs due to the negative base effect from exchange rates and CO2) and in impairment on financial assets, which reflected losses of 26.8 million euro (losses of 8.9 million euro in the year-earlier period) arising on the impairment of the equity investment in the West China Cement company. The share of profit (loss) of equity-accounted investees was positive at 3.1 million euro (a loss of 2.3 million euro in the first half of 2013). Despite the progress in operating results, the increase in non-recurring finance costs (owing to the exchange-rate effect and impairment losses on equity investments, which had an overall negative impact of approximately 48 million euro) and the rise in income tax expense (from 64.9 to 80.6 million euro) led to a loss for the first half of 2014 of 79.6 million euro (a loss of 43.1 million euro in the year-earlier period). The loss attributable to owners of the parent was 113.3 million euro (a loss of 85.1 million euro) and profit attributable to non-controlling interests was 33.7 million euro (profit of 42.0 million euro). In the first half of 2014, capital expenditure amounted to 277.0 million euro (140.9 million euro in the year-earlier period). The significant increase related to work on the strategic revamping projects in Rezzato (Italy) and Devnya (Bulgaria); the plants will be completed by the end of the year and will generate positive effects as from 2015. The rise in capital expenditure was also due to investment for the new grinding center in India. Considering the high level of capital expenditure, the small increase in cash flow from operating activities and the share capital increase completed in the first half and used only in part to fund acquisition of the Ciments Francais shares tendered by June 30, net debt at the end of the first half of 2014 stood at 1,851.7 million euro, a decrease of 82.3 million euro from December 31, 2013 (1,934.0 million euro). Total equity at the end of the first half of 2014 was 3,854.2 million euro (3,783.0 million euro at December 31, 2013), an increase arising largely from the extraordinary transactions of the 'i.150' plan. OUTLOOK - Trends in demand on the construction market in the Group countries vary significantly and, in Europe in particular, are still largely unfavorable. The positive market dynamic continues in Egypt, although accompanied by inflationary pressures on cost factors; meanwhile, in Morocco, growth has been slower than expected. On the Asian markets, the growth in demand is supported by a positive situation in sales prices. The measures to improve industrial efficiency and, above all, the far-reaching re organization of the Group's production operations in Europe will continue to produce improvements in operating margins in the second half. In this context, the Group feels able to confirm that, largely thanks to the performance expected in the final months of the year, it will report growth in full-year recurring EBITDA compared with the figure for the year ended December 31, 2013. At the end of the year, in part as a result of completion of the operations on the Group's capital structure, the net financial position will, as forecast, be slightly higher than the values at December 31, 2013, owing to the current industrial revamping and strategic development investment projects. BOND ISSUES AND MATURITIES No bonds have been issued in the last 12 months by Italcementi or by its subsidiary Italcementi Finance. No bonds are due to mature in the 18 months after June 30, 2014. Disclaimer This press release may contain forward-looking statements. These statements are based on the Group's current expectations and projections about future events and, by their nature, are subject to inherent risks and uncertainties. They relate to events and depend on circumstances that may or may not occur or exist in the future, and, as such, undue reliance should not be placed on them. Actual results may differ materially from those expressed in such statements as a result of a variety of factors, including: continued volatility and further deterioration of capital and financial markets, changes in commodity prices, changes in general economic conditions, economic growth and other changes in business conditions, changes in legislation and the institutional context (in each case, in Italy or abroad), and many other factors, most of which are beyond the Group's control. Media Contact: Tel: (39) 02.29024.212 Investor Contact: Tel: (39) 035.396.750 (c) 2014 Electronic News Publishing - |