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Cementos Portland Valderrivas results and appointments

14/11/2013

Cementos Portland Valderrivas results and appointments

  • Drastic cost adjustment to adapt to the size of the market, which continues to shrink but which should soon bottom out   
  • US and Tunisia account for 60% of group revenues 
Cementos Portland Valderrivas results and appointments

Cementos Portland Valderrivas reduced losses by 74% in the first nine months of 2013. The adjustment plans have started to reduce losses, which amounted to 24.8 million euro, compared with 95.2 million euro in the same period last year.

Group revenues amounted to 413 million euro: 168 million euro in Spain and 245 million euro in other countries. Plants in the US and Tunisia accounted for 60% of group revenues and partly offset weak cement demand in Spain, which totalled 8.3 million tonnes in the first nine months of the year, i.e. 22% less than in the same period of 2012. EBITDA totalled 42.3 million euro, 35% less than the previous year.

The group sold CO2 emission rights worth 2.6 million euro, compared with 31.4 million euro in 2012. Excluding that item, EBITDA would have expanded by 17% as a result of the measures implemented to adapt costs to market conditions and to increase operational efficiency.

The US subsidiary advanced notably, due to a significant improvement in management and growth in sales, with the result that its three plants on the east coast are driving the group's recovery. The plant in Tunisia also increased sales, by 4%, attributable to growth in exports to Libya and Algeria.

EBIT was positive: 18.9 million euro. This item reflects capital gains from the swap and sale of assets with CRH as well as provisions in connection with asset impairments and workforce restructuring. After applying 77 million euro in financial expenses and 36.9 million euro in tax credits, consolidated income for the period was -24.8 million euro. The Group's net financial debt at 30 September was 1.375 billion euro.

Adjustment plan

Cementos Portland Valderrivas continues to implement measures to reduce costs and increase profit margins. The plan envisions a recurring improvement of 37 million euro in EBITDA, based on restructuring capex of approximately 30 million euro. More than 75% of the planned actions have already been completed or are under way, and the impact is expected to be fully visible in 2014 earnings.

The adjustment plan is based on five main pillars: 1) temporary closures of cement plants in Spain in response to the market situation, 2) redimensioning the concrete, mortar and aggregate businesses so as to retain only profitable facilities, 3) adjusting the corporate structure in terms of personnel and offices, 4) reducing the total payroll, and 5) simplifying the corporate structure.

Appointments

The Cementos Portland Valderrivas Board of Directors yesterday resolved unanimously to appoint José Ignacio Elorrieta Pérez de Diego as a director to fill the vacancy resulting from Juan Castells' resignation.

To fill the vacancies on committees left by Mr Castells, the following appointments were made: Lourdes Martínez Zabala to the Appointments, Remuneration and Corporate Governance Committee; Cartera Deva, S.A., represented by Jaime Llantada Aguinaga, to the Audit and Control Committee; and Gustavo Villapalos Salas to the Executive Committee.
 

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