Titan Q3/9M 2016 – analysis, comments by Manos Chatzidakis | Mikrometoxos.gr

Titan Q3/9M 2016 – analysis, comments by Manos Chatzidakis

03.11.2016 12:51

Titan Q3/9M 2016 –

Titan (Q3/9M: 16 Results):  Titan announced a broadly in line set of results and better than expected underlying profitability.  Consolidated turnover reached €1,124.2m posting a 9.2% increase compared to the same period in 2015. EBITDA increased by 24.1% reaching €205m. Net profit, after minority interests and the provision for taxes stood at €121.9m compared to €36.2m in the nine months of 2015. Reported net profit was positively affected by a deferred tax recognition of €79.4m in the US associated with previously unrecognized carry-forward net operating losses, generated in previous years. Group Q3 turnover grew by 12.2% reaching €400.4m. EBITDA stood at €85.5m posting an increase of 42.8%. Net profit, after minority interests and the provision for taxes stood at €112.7m versus €12m in the third quarter of 2015. Results were favourably affected by the recording of deferred tax benefits in the US, but were negatively impacted by a €6.4m provision taken in Egypt for FX losses arising from outstanding balances in foreign currency between the Egyptian subsidiaries and other Group affiliates. Geographical Performance:


  • US Market:  Turnover in the US posted a 17.7% increase and reached €584.2m while EBITDA grew by 37.8% to €98m. Turnover and EBITDA from the US account for c.50% of the respective figures for the Group at this time.
  • Greece: The small improvement recorded in the third quarter of 2016 is solely due to an extremely low basis of comparison versus the respective quarter in 2015, which immediately followed the introduction of capital controls that had brought building activity essentially to a halt. Exports, which continue to absorb more than 2/3 of the production of Greek plants, mitigate, to a certain extent, the decline in demand in the domestic market. Group turnover in region Greece and Western Europe in the nine months of 2016, declined by 1.5% and stood at €195.6m. EBITDA declined by 10.9% compared to the nine months of 2015 and stood at €28m.
  • Southeastern Europe: Turnover posted a marginal increase of 0.8% and stood at €156.8m while EBITDA declined by 1% to €46.1m.
  • Egypt: The recovery is due partly to increased production and sales volumes, and partly to the decline in production costs following the gradual conversion of the plants to solid fuels. Turnover recorded an 18% increase in local currency, and a 4.9% increase in Euro-terms, reaching €187.7m. EBITDA stood at €32.8m more than doubling over the corresponding period in 2016 (€16m).
  • Turkey, demand continued at healthy levels for the third quarter of the year, owing both to public and private works. Net profit attributable to Titan from subsidiary reached €3.5m.
  • Brazil: On 20th September, 2016, Titan Group concluded the deal for the investment in Cimento Apodi in Brazil, which marks the expansion of Group activities in Latin America. Cimento Apodi owns a modern integrated cement plant in Quixeré operating since 2015 and a grinding cement plant in Pecém port, close to the city of Fortaleza, operating since 2011. Cimento Apodi has production capacity of over 2 million tons of cement per year. Through this investment,


Other 9M:2016 Highlights:

  • Cash Flow: Operating cash flow in the nine months of 2016, reached €80m, versus €8m in the same period the previous year, owing to the improved profitability of the Group.
  • Debt: Mostly as a result of acquisitions spending, Group net debt increased by €91m compared to December 2015 levels and stood at €713m at the end of September 2016. In addition to acquisitions, which amounted to a total of €91m in the nine months of 2016, capex for the Group stood at €96.6m. These regard mostly the expansion of activities in the US and investments towards attaining energy self-sufficiency in Egypt
  • Outlook: Recovering in US market is the key driver growth and profitability, while Egypt is also recovering due to the growth in market demand as well as higher utilisation and increased cost competitiveness of Group plants. The recovery of the construction industry in the US is expected to continue beyond the current year. Greece is expected to remain at extremely low levels of demand, similar to those of 2015. Greek cement production is expected, once again in 2016, to be largely geared towards exports. In South eastern Europe, economic recovery is still being affected by the economic weakness of Eurozone neighbours, which are the region’s main trading and investment partners. Although signs of recovery are evident in certain countries, construction in the region overall lacks momentum. In Turkey, demand currently appears unaffected by recent political events. In Brazil, cement demand is expected to continue declining for the remainder of 2016.


The following table summarise reported vs estimated results:


ΤΙΤΑΝ 2015 2016 Y-o-Y 2016 Act. vs 2015 2016 Y-o-Y 2016 Act. vs
EUR m. (%) 9M Est. Est. 3Q 3Q (%) 3Q Est. Est.
Sales 1,029.5 1,124.2 9.2%  1,122.0 0.2%  357.0 400.4 12.1%  398.2 0.6% 
EBITDA 165.2 205.0 24.1%  202.5 1.2%  59.9 85.5 42.8%  83.0 3.0% 
EBITDA Mrg 16.0%  18.2%  +219 bps  18.0%  1.0% 16.8%  21.4%  +459 bps  20.9%  2.4%
Net Income 36.2 121.90 236.9% 38.83 213.9% 12.0 112.7 840.8% 29.6 280.4%
Net Mrg 3.5% 10.8% +733 bps 3.5% 213.3% 3.4% 28.1% +2,479 bps 7.4% 278.3%
Net Income adj. 36.2 42.50 17.5%  38.83 9.4%  12.0 33.3 178.0%  29.6 12.4% 
Net Mrg adj. 3.5%  3.8%  +27 bps  3.5%  9.2% 3.4%  8.3%  +496 bps  7.4%  11.8%



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Best Regards,

Manos Chatzidakis

Head of research

Beta Securities S.A.

29 Alexandras Ave.

GR – 11473

Athens, Greece


Tel: +30 210 6478755 / 754

Fax +30 210 6410139

Email: mchatzidakis@beta.gr



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