Displaying items by tag: Greece

Greece: Titan’s turnover has risen by 9.2% year-on-year to Euro1.12bn for the first nine months of 2016 from Euro1.03bn in the same period of 2015. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 24.2% to Euro205m from Euro165m. It attributed the result to growth in the US market and improvements in Egypt.

In the US the cement producer’s turnover rose by 17.7% to Euro584m and in Greece it grew by 4.9% to Euro188m despite negative currency effects. This was due partly to increased production and sales volumes and partly to the decline in production costs following the gradual conversion of its plants to solid fuels.

In addition, the group concluded its deal to buy a 50% stake in Cimento Apodi in Brazil in September 2016. Cimento Apodi owns a cement plant in Quixeré that has operated since 2015 and a grinding cement plant in Pecém near Fortaleza, that has been in operation since 2011. It has a production capacity of over 2Mt/yr.

Greece: Titan’s turnover has risen by 7.6% year-on-year to Euro724m in the first half of 2016 from Euro673m in the same period in 2015. Its earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 13.5% to Euro120m from Euro105m. However, its net profit fell by 62% to Euro9.2m from Euro24.2m for the half-year period. The construction materials company benefited from growth in the US and Egypt but currency exchange rates, particularly in Egypt, hit its profits.

In the US Titan reported that sales revenue increased by 18.8% to Euro373m despite a long second quarter maintenance period at its Pennsuco cement plant in Florida. Turnover in Greece and Western Europe fell by 9.1% to Euro133.4m. In South-eastern Europe it rose by 6.7% to Euro97m. In Egypt turnover rose by 11.7% in local currency terms but fell by 0.6% in Euros to Euro121m. the group noted that in this country group plant production levels have reverted to levels similar of the pre-fuel crisis years. Coal mills have been implemented on both production lines at the Beni Suef plant since the end of March 2016 to reduce costs. Similar work at the Alexandria plant is on-going and will be completed by the end of 2016.

The group expects growth in the US to drive growth and profit for Titan in 2016 as a whole with support from an improved market in Egypt.

Greece: Heracles Cement Group, a subsidiary of LafargeHolcim, has announced the completion of a first phase of an investment plan to modernize its factory in Volos.

The Euro5m investment project aims to boost the competitiveness of the factory in the domestic market and to boost its export activity. The project has been interpreted by some as evidence of LafargeHolcim’s longer term confidence in the country, which has suffered from poor economic conditions and a weakened construction sector for much of the past decade.

Europe: The European Court of Justice (ECJ) has ruled that a Greek law that requests employers to receive approval by the Labour ministry before making bulk redundancies is incompatible with European Union law. The judgement was made in relation to the layoff of a group of workers at the Halkida cement plant when Lafarge purchased the plant from AGET Heracles in 2013, according to the Athens News Agency. The Labour ministry blocked the request, citing conditions in the labour market, the financial situation of the company and the interest of the national economy. Lafarge then appealed to the Council of State, which then referred the case to the ECJ.

Greece: Titan has reported a loss of Euro18.6m for the first quarter of 2016. The figure is a loss compared to the net profit of Euro6.6m it made in the same period in 2015. However, its sales turnover rose by 19% to Euro338m from Euro284m and its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 86% to Euro43.3m from Euro23.2m. The company blamed the loss on currency exchange variations particularly from the devaluation of the Egyptian pound against the Euro by 19%.

The group noted that its sales had increased in the quarter in all regions with the exception of Greece. By region it saw strong growth in the US with a 34% in turnover to Euro174m. In Greece construction was mostly limited to government projects limited by the continued economic problems and capital controls. In the group’s south-eastern Europe regions turnover rose by 27.6% to Euro35.8m. In Egypt demand for cement continued to grow helped by the use of solid fuels at its plants. Turnover in the quarter increased by 8.3% to Euro65.3m.

Greece: Titan’s turnover grew by 20.7% year-on-year to Euro1.14bn in 2015 from Euro1.16bn in 2014. Its net profit rose by 9.1% to Euro33.8m from Euro30.9m. The cement producer attributed the result to growth in the US market.

Despite rising turnover in the fourth quarter of 2015 the group reported a net loss of Euro2.4m down from a net profit of Euro0.4m in the fourth quarter of 2014. This was due to its subsidiary Titan America suspending construction of a cement plant in Castle Hayne, North Carolina, resulting in a Euro12.4 impairment charge due to the suspended investment.

By region the group reported that its total turnover for Greece and Western Europe in 2015 fell by 5.6% to Euro269m, mainly due to the continued depression in the construction market in Greece. Turnover in the US grew by 45% to Euro680m, supported by a growing residential housing market particularly in the south east of the country. In Southeastern Europe turnover remained static at Euro209m. In Egypt cement demand grew by 5% but low prices in the second half of the year reduced profits. Turnover increased by 22.3% to Euro241m in this territory.

Group net debt rose by Euro81m in 2015 to Euro621m, due to high capital expenditure in 2015, the acquisition of a minority stake in Antea in Albania and the strengthening US Dollar.

Greece: George Michos has been appointed CEO of Heracles, member of LafargeHolcim Group, assuming his duties as of 1 October 2015. He succeeds Pierre Deleplanque, who after seven years in Heracles, moves to become Area Manager Emerging Europe of LafargeHolcim Group, while remaining on the board of Heracles as a non-executive member.

George Michos had previously been Senior Vice President RMX Concrete for Lafarge since January 2013 and in parallel, since July 2014, leader of the Operating Model & Organisation workstream for the LafargeHolcim merger. He joined Heracles General Cement in Greece in 2004 and held various executive positions before moving to India in early 2008 and becoming the COO of Lafarge India. In mid-2011 he became Senior Vice President Cement Strategy and M&A for the Lafarge Group in Paris.

He began his career in the construction industry in Greece in 1994 and from 1998 until 2003 he worked in consulting companies in London, Paris and Athens. Michos is 45 years old and married with one daughter, is a graduate of the National Technical University of Athens in Electrical & Computer Engineering (Dipl. Eng) and holds an MBA from Harvard Business School.

Greece: Titan Cement has posted a 26% year-on-year rise in its net profit to Euro17.6m for the first half of 2015, helped by a strong performance in the US. Its sales increased by 25.8% to Euro389m, boosted by higher demand for building materials and a stronger Dollar in the US, according to Reuters.

The Greek debt crisis directly hit the local cement industry on Tuesday 30 June 2015 when Titan Cement reported that it was unable to pay a dividend to its shareholders. The leading local cement producer blamed the capital controls introduced by the government.

It is worth looking at the effects on the domestic cement industry as the Eurozone bureaucracy and the Greek government play 'chicken' with each other while Greece starts the default process, having failed to pay the latest International Monetary Fund (IMF) payment on 30 June 2015. Greece will now join a group, possibly even more select than the European Union, of countries that have failed to pay back the IMF, including current defaulters like Sudan and Zimbabwe.

A better comparison might be made with Argentina which defaulted upon its foreign debts in 2001. Its construction industry fell by 12% year-on-year in 2001 and by a further 30% in 2002. Cement consumption and cement production utilisation rates hit 23% in 2002. One key difference with Greece is that the country has had major financial difficulties for far longer than Argentina. Argentina ran into financial depression in 1998 and defaulted in 2001. Greece ran into financial trouble following the 2008 financial crisis and then received its first bailout in 2010.

As the capital controls show, even initial responses to the financial situations are impacting upon the standard transactions a limited company conducts. The Financial Times ran an article in May 2015 examining the potential effects on businesses of a debt default and Greek exit from the Eurozone (Grexit). In short, business and commerce will continue where possible reacting to whatever comes their way. For example, an olive oil producer reported switching to exports to make profits. Crucially though, another company interviewed, a construction contractor, worried about potential cuts to government or EU-led infrastructure projects.

As Titan reported in its first quarter results for 2015, its Greek market has been dependent on road building. In February 2014 Titan Cement reported its first improved operating results in seven years followed by profit in 2014 as a whole. The other major cement producers, Lafarge subsidiary Heracles General Cement and Italcementi subsidiary Halyps Cement, reported an improved construction market in 2014 with rising cement volumes. However, it was noted by Lafarge that it was developing exports to 'optimise kiln utilisation.' Titan also noted the benefits of exports in its first quarter report for 2015, focusing on a strengthening US Dollar versus the Euro. Given on-going events, one suspects there is going to be a lot more 'development' of this kind.

To set some sense of scale of the crisis Jim O'Neill, former head of economics at Goldman Sachs, famously calculated that, at the height of its growth, China created an economy the size of Greece's every three months. What happens next is down to the crystal balls of economists, although the path of least resistance now seems to be pointing at further default, departure from the Eurozone and Euro and further significant financial pain for Greece.

It looks likely that the local construction market will stay subdued and exports will offer a lifeline. How much the EU is prepared to let Greece default on its bills and then try and undercut its own over-capacity cement industries remains to be seen. However, since the main cement producers in Greece are all multinational outfits, it will afford them some flexibility in their strategy in coping with the fallout. Meanwhile a cement production capacity of around 14Mt/yr for a population of 11m suggests over capacity by European standards. If exports can't help then the situation looks grim.

UPDATE: Here is Global Cement's previous take on Greece from June 2012

Greece: According to Reuters, Greece's Titan Cement has postponed its 2014 dividend payment, due on 1 July 2015, because of the bank holiday announced by the Greek government on 28 June 2015. "There will be a new announcement regarding the new date and the method of payment," said Titan Cement about the dividend.