Titan Group turnover for the first nine months of 2011 stood at €838.9m, posting an 18.4% decline compared to the nine months of 2010. Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) declined by 15.5% reaching €219.8m. Net income after minority interests and the provision for taxes stood at €52.9m, a decline of 46.2% compared to the same period in 2010.
The deterioration in operating results is due primarily to the rapid decline in construction activity in Greece, continuing very low levels of demand in the US and the slowdown recorded in Egypt during the third quarter of the year. Increased prices for liquid and solid fuels also had a negative impact on production costs. On the positive side, higher contributions from Southeastern Europe and Turkey had a positive effect on Group results.
The depreciation of the Egyptian Pound as well as the Turkish Lira against the Euro, which was reflected in €17.7m negative foreign exchange differences in the Group’s financial expenses, negatively impacted results. At constant exchange rates, turnover would have declined by 14%, while the decline in EBITDA would have stood at 10.5%.
| € m. | Q3 2011 | Q3 2010 | % change | Nine months 2011 | Nine months 2010 | % change |
|---|---|---|---|---|---|---|
| Turnover | 282 | 347.7 | -18.90% | 838.9 | 1,028.50 | -18.40% |
| EBITDA | 78.5 | 98.9 | -20.60% | 219.8 | 260.3 | -15.50% |
| Earnings before tax | 37.8 | 29.8 | 26.80% | 74.5 | 118.5 | -37.20% |
| Net income* | 29.5 | 30 | -1.70% | 52.9 | 98.3 | -46.20% |
| *after tax and minority interests | ||||||
OPERATING RESULTS
In Greece, the unprecedented decline in construction activity continued. The increasing political and economic uncertainty regarding the country’s course translated into a steep decline in demand for building materials in both the private and public sectors. As has already been noted, in addition to the challenges faced in the domestic market, exports contracted for North African markets did not materialize due to prevailing conditions in those countries. The decline in operating results was mitigated, to some extent, by the sale of excess carbon dioxide rights resulting from low levels of production at the cement plants.
EBITDA declined by 43.3% compared to the nine months of 2010 and stood at €42.7m.
In the USA, building activity remained stagnant at extremely low levels. Althouth overall economic activity is growing at a measured pace, the construction industry remains in a deep recession.
Despite headwinds, the Group’s Separation Technologies subsidiary, which is engaged in the installation and operation of fly ash processing units, continued on its growth trajectory.
EBITDA in the USA for the nine months of 2011, stood at a negative €4.3m.
In the countries of Southeastern Europe there are indications that the recovery in their economies is beginning to have a positive effect on construction activity and sales of cement volumes posted a slight increase compared to the same period last year. During the quarter, the Group’s plant in Bulgaria launched a new unit for the pre-processing and recycling of municipal waste, contributing to the Group’s stated aim of reducing its carbon footprint.
In total, operating profitability in Southeastern Europe posted a marginal increase and stood at €73.4m.
In Egypt, social upheaval is gradually impacting the economy, thereby also affecting the construction sector. In addition to the decline witnessed in demand, the launch of new capacities affected prices. In contrast, high economic growth rates in Turkey are resulting in rapid growth of the construction sector in that country.
Total operating profitability for the Eastern Mediterranean region increased by 2.4% and stood at €108.1m.
Group net debt as at the end of September stood at €768m, down from €1,114m at the end of December 2008, €971m at the end of December 2009 and €777m at the end of 2010.
PROSPECTS FOR THE REMAINDER OF 2011
The Group expects that the trends recorded in its markets in the nine months of the year will not alter substantially during the remainder of 2011.
In Greece, the prospects for the construction sector remain bleak, owing to the deterioration of the economic and political environment. In this context of uncertainty as regards the outcome of the crisis the country is undergoing, demand for building materials, for both in the private and public sectors, has all but evaporated.
In the USA, anemic growth and the high levels of unemployment have dashed expectations of a meaningful recovery of the construction sector, in the short term.
In Southeastern Europe, the expansion of Group activities in conjunction with the gradual return of the region to growth, are expected to gradually result in an increase in sales.
In Egypt, the evolution of the market is affected by the social upheaval and the attendant slowdown of the economy. In Turkey, in contrast, strong economic growth is expected to contribute to the further development of private and public building activity.
In the context of prevailing conditions, the Group will remain focused on increasing its financial flexibility and on reducing costs.
Despite the current economic challenges, Titan continues to make progress against its long-term goals, including sustainability commitments undertaken in the context of the Cement Sustainability Initiative.
PARENT COMPANY TITAN S.A.
Turnover at the parent company for the nine months of 2011 stood at €169.7m posting a 40.8% decline. Earnings before Interest, Tax, Depreciation and Amortization (EBITDA), stood at €45.7m recording a 33.6% decline, which reflected the continuing severe recession of construction activity in Greece.
Net income for the nine months of 2011 stood at €2.9m, an 88% decline compared to the same period in 2010.
TITAN is an independent cement and building materials producer with over 100 years of industry experience. Based in Greece, the Group operates in 9 countries, owning 14 cement plants. Throughout its history TITAN has aimed to combine operational excellence with respect for people, society and the environment.
In 2010, the Group sold over 17.4 m. tonnes of cement and cementitious materials, 4 m. m3 of ready mixed concrete, 13.3 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
The above announcement was notified to the Athens Exchange, the HCMC and was also posted on the Athens Exchange website.