AFRICA: NIGERIA: Dangote Cement Plans $3.9 Billion Investment to More Than Double Output

Dangote Cement Plc (DANGCEM), Nigeria’s biggest company by market value, plans to invest $3.9 billion over the next 28 months to more than double production of the building material, Chairman Aliko Dangote said.

The Lagos-based company plans to boost cement output to 50 million metric tons by 2013 from an estimated 20 million tons this year, Dangote said in an interview in Cape Town today, where he is attending the World Economic Forum on Africa.

Growth in Nigeria, Africa’s most populous nation, will fuel most of the demand for cement in coming years, Dangote said. While the company plans to expand its operations, its main focus is in sub-Saharan Africa for now, he added.

AFRICA: EGYPT: Lafarge cuts cement demand forecast, Q1 profit falls

The world's largest cement maker, Lafarge, lowered its forecast for global demand in 2011 on Thursday after inflation and events in Egypt led it to post slightly lower-than-expected first-quarter results.

Lafarge is now forecasting a rise of 2-5 percent in demand this year led by newly expanding economies in China, India, Indonesia, Turkey and Brazil — where it has 70 percent of its capacity. Pricing is expected to move higher.

In February, Lafarge predicted a 3-6 percent rise in demand.

The French group also said it had received €11 million ($15.37 million) from asset sales in the first three months of 2011. It pledged in February to sell €750 million of non-strategic assets this year to cut debt.

Lafarge plans to cut debt by €2 billion this year in an effort to improve its financial profile after the 2007 purchase of Egyptian company Orascom Cement for 8.8 billion.

In a conference call on Thursday, Chief Executive Bruno Lafont told reporters the group was "confident" it would achieve or exceed this amount. Net debt at the end of the first quarter stood at 14.2 billion euros.

Lafont refused to comment on a possible sale of Lafarge's plaster activities, however.

Lafarge said in a statement that current operating profit fell 5 percent to €224 million in the first quarter. Sales rose 9 percent to 3.56 billion.

Analysts polled by Reuters were expecting current operating profit of €254 million and sales of 3.52 billion.

Political unrest in Egypt led to a €30 million decline in current operating income in the cement division, Lafarge said.

AFRICA: NIGERIA: Dangote Cement records N27.47b profits in Q1

Dangote Cement Plc (DCP), a member of the Dangote Group has announced its results for the first quarter ended March 31, 2011 with turnover put at N54.51 billion compared to N49.87 billion in 2010.

According to a statement by the company on Thursday, the unaudited interim financial report approved by the Nigerian Stock Exchange (NSE), showed that gross profit rose from N26.73 billion to N28.83 billion in the review period.

Its operating profit also increased from N25.29 billion to N27.36 billion, while profit before tax (PBT) stood at N27.90 billion as against N25.45 billion. The Cement Company posted a profit after tax of N27.47 billion, a significant leap from N24.71.

In the full year ended December 31, 2010, the company reported a turnover of N202.565 billion, as against N189.6 billion recorded for the preceding year.

While the company’s profit before tax rose by 58.9 per cent to N101.33 billion from the preceding year’s N63.8 billion, profit after tax increased by 73.7 per cent to N106.6 billion from N61.4 billion in 2009.

President of Dangote Group, Alhaji Aliko Dangote has assured the shareholders of good returns on their investments, stating that the significant contributions of the new line in Obajana and commencement of production of six million metric tons in Ibeshe plant later this year, will positively affect the company’s turnover and ultimately returns on shareholders investments.

Special Adviser to the President Dangote Group, Eng. Joseph Makoju speaking on the result said “this impressive result for 2010 financial year when viewed against the background of the relatively stable environment of 2010 is not unexpected as the supply and cost of major input of cement manufacture such as natural gas, LPFO and diesel were relatively stable.”

He commended the Federal Government for improved environment in the Niger Delta-the major source of energy driving the nation’s industrial sector adding that in the face of competition from cheap but low quality imports/products being dumped in our markets, “Nigerian manufacturers need predictable, stable and realistically priced supply of gas, fuel oil and diesel to keep their energy cost low and ultimately the end-product pricing competitive.”

Dangote Cement Plc is currently the biggest quoted company in West Africa. The latest ranking of Africa’s Top 50 Companies released by IC Publications, publishers of London-based African Business magazine, recently, indicated that Dangote Cement had a total market value of $12.2 billion, as at mid-March 2011, making it the largest company in the entire West African sub-region.

INDIA: Cement demand increases locally

KARACHI: Local cement demand continued its recovery during April 2011, rising by three percent on yearly basis, said an analyst. 

Cement exports witnessed a lower than anticipated decline of one percent in April over the same month of last year, said Atif Zafar, an analyst at JS Research. 

“We slightly trim our fiscal year 2011 assumption for local sales to 22.2 million tons, while retaining our 9.7 million tons target for exports.” 

Local demand rose despite cut in the size of Public Sector Development Programme and crowding out of private credit offtake. “We believe higher farm income on the back of rising commodity prices is a key catalyst behind the recovery in domestic demand,” said Zafar. 

However, growth during April remained skewed towards the south of the country, rising by 35 percent year-on-year there compared with a drop of three percent in the northern region.

TURKEY: Turkish Equity Movers: Baticim, Batisoke, Dogan Yayin, Sinpas

Turkey’s benchmark ISE National 100 Index (XU100) fell for the third day, dropping 551.4806 or 0.8 percent, to 68,823.82 at 3:10 p.m. in Istanbul.

The following stocks were active. Symbols are in parentheses.

Baticim Bati Anadolu Cimento Sanayii AS (BTCIM) , a cement producer, rose for the seventh day to extend an all-time high, gaining 58 kurus, or 5.8 percent, to 10.7 liras. Turkey’s asset sales agency on May 4 invited Baticim Enerji, in which Baticim holds an 80 percent stake, to buy twopower plants by a July 4 deadline. The shares have gained 32 percent since April 29, when the original winner of the auction, Akfen Holding, asked to extend its May 2 deadline to buy the plants, a request that was denied.

Batisoke Soke Cimento Sanayii TAS (BSOKE) , which owns the remaining 20 percent of Baticim Enerji, gained for a seventh day to a more than three-year high, adding 11 kurus, or 5.2 percent, to 2.24 liras.

Dogan Yayin Holding AS (DYHOL) , a newspaper publisher, fell for the third day, dropping 3 kurus, or 1.7 percent, to 1.76 liras. The company got conditional approval from the market regulator to double its capital to 2 billion liras ($1.3 billion) via a rights issue.

Sinpas Gayrimenkul Yatirim Ortakligi AS (SNGYO) , a real- estate investment trust, dropped as much as 4 kurus, or 1.8 percent, after it reported 18.1 million liras of profit in a filing for tax purposes only to the Istanbul Stock Exchange. Sinpas fell 2 kurus, or 0.9 percent, to 2.17 liras.

FRANCE: CIMENTS FRANCAIS: Results for the first quarter of 2011

Results for the first quarter of 2011
  

• CONSOLIDATED REVENUES: 972.6 million euros (+7.0%) 
• RECURRING EBITDA: 146.6 million euros (+2.0%)  
• EBIT: 56.8 million euros (-7.1%) 
• NET CONSOLIDATED GROUP PROFIT: 142.1 million euros 
• NET FINANCIAL DEBT: 1,138.4 million euros (-19.3%) 

****

Paris, May 6, 2011 - At a meeting on May 3 chaired by Yves René Nanot, the Board of Directors of Ciments Français (Italcementi Group), examined and approved the unaudited consolidated accounts as of March 31, 2011.

SIGNIFICANT EVENTS

On March 25, 2011 Ciments Français (Italcementi Group) completed the sale announced on February 25, 2011 of Set Group Holding and its subsidiaries to Limak Holding. The sale concluded for a total amount of 290 million euros on a cash and debt-free basis resulted in 109.1 million euros in gains recognized under "profit from discontinued operations".

Pursuant to IFRS 5, the profit and loss from sold operations is presented in the caption "Profit (loss) from discontinued operations" and data for Q1 2010 is restated according to the same method.

RESULTS FOR THE PERIOD

The improved pace in the construction sector activity in the first quarter was supported by much more favorable weather conditions than in Q1 2010 in Europe and North America. Most of the emerging countries still enjoyed dynamic growth, particularly in Asia, while Egypt suffered from a temporary suspension of business activity due to the political crisis.

Group sales volumes increased in all three business segments: +3.2% for cement and clinker at 10.3 million tonnes, + 6.1% for aggregates at 8.6 million tonnes and +14.4% for ready mix concrete at 2.4 million m3.

In cement and clinker, sales volumes increased in France/Belgium (+21.9%), India (+24.5%), Thailand (+9.1%), North America (+6.8%) and Morocco (+5.5%). Volumes dropped in Egypt (-13.0%) and Spain (-7.5%).
In aggregates, sales volumes increased in North America (+26.5%) and France/Belgium (+17.0%); they declined in Morocco (-5.6%) and Thailand (-3.5%).
In ready mix concrete, sales volumes grew in France/Belgium (+31.2%), Morocco (+20.3%) and Thailand (+16.0%) but fell in Spain (-20.4%) and Egypt (-14.0%).

Q1 consolidated revenues at 972.6 million euros (+7.0% compared with the year-earlier period) increased in India (+53.3%), Thailand (+30.4%), France/Belgium (+20.5%), Morocco (+5.1%) and North America (+3.7%). They decreased in Egypt (-21.6%) and Spain (-12.4%).

Recurring EBITDA amounted to 146.6 million euros, a minor increase (+2.0%) primarily due to higher energy costs despite a favorable effect from the sale of CO2 emission rights (5.8 million euros) and lower taxes on raw materials in Egypt. EBIT was down 7.1% at 56.8 million euros mainly because of an increase in amortization and depreciation related to the commissioning of new plants.

After recognition of 7.5 million euros in net interest expense (as against 21.9 million euros in 2010, which included the impact of the US private placements buyback), net consolidated Group profit totaled 142.1 million euros (including the impact of the sale of Set Group Holding for 109.1 million euros) as against 28.1 million euros in Q1 2010. The share of profit attributable to equity owners of Group parent amounted to 115.5 million euros compared with -1.1 million euros in Q1 2010.

Investments in industrial and financial fixed assets over the first three months of 2011 amounted to 50.8 million euros (primarily in France/Belgium) as against 74.5 million euros in Q1 2010. Their decrease resulted from the completion of the new Greenfield plants in Morocco and India.

As of March 31, 2011 net financial debt was down 273.1 million euros (-19.3%) at 1,138.4 million euros as against 1,411.6 million euros as of December 31, 2010. The decrease resulted essentially from the sale of Set Group Holding, with a net reduction of 281.4 million euros in net financial debt.
Total equity amounted to 4,212.1 million euros as against 4,268.0 million at the end of December 2010. The debt to equity ratio (net financial debt/total equity) was 27.0% as against 33.1% as of 31 December 2010.

OUTLOOK

The Group's performance for 2011 should reflect the positive trends reported in India, Thailand and Morocco, thus offsetting the drop in Egypt considering the country's political situation. In Western countries, the demand for major projects is expected to continue to suffer from public deficits, mitigating the first signs of recovery emerging in the early months of the year, particularly in France.
The sales pricing policy will seek to compensate for the continued increase in energy costs and inflation.
In this context, following the cost containing programs implemented over the last three years, the Group's financial strength appears further enhanced by the actions already carried out or forthcoming towards productivity and monetization of non-strategic assets.
On this basis, the Group was able to face difficult economic conditions. The Group will continue to develop its existing operations while watching for external growth opportunities.

BUSINESS TREND FOR Q1 2011

Sales volumes by geographical segment and by business segment

Sales and internal transfers (1)	Cement & clinker (millions of tonnes)			Aggregates  (millions of  tonnes)			Ready mix concrete  (millions of m3)
	2011	% change vs. 2010		2011	% change vs. 2010		2011	% change vs. 2010
		A	B		A	B		A	B
Western Europe	2.5	+14.1	+14.1	7.8	+6.4	+6.4	1.5	+20.9	+20.9
North America	0.6	+6.8	+6.8	0.2	+26.5	+26.5	0.1	+0.7	+0.7
Emerging Europe, North Africa & Middle East	4.0	-8.2	-8.2	0.5	-5.0	-5.0	0.6	+3.3	+3.3
Asia	2.9	+14.9	+14.9	0.1	-3.5	-3.5	0.2	+12.5	+12.5
Cement/clinker trading	0.6	-53.9	-53.9	-	-	-	ns	-	-
Eliminations	(0.3)	-	-	-	-	-	-	-	-
Total	10.3	+3.2	+3.2	8.6	+6.1	+6.1	2.4	+14.4	+14.4

Western Europe: France, Belgium, Spain & Greece     North America: U.S.A., Canada & Puerto Rico
Emerging Europe, North Africa & Middle East: Egypt, Morocco, Bulgaria, Turkey (Afyon) & Kuwait
Asia: Thailand, India, China & Kazakhstan
(1)        Amounts given relate to fully consolidated companies and companies consolidated using the proportionate consolidation method up to Group share.
A: at historical consolidation scope     B: at comparable consolidation scope      ns: not significant

ECONOMIC TREND FOR Q1 2011

Breakdown by business segment

Revenues  (M€)	Q1 2011	Q1 2010	% changes vs. 2010 Historical basis	% changes vs. 2010 Comparable basis & exchange rates
Cement & clinker	656.4	637.9	2.9%	3.2%
Aggregates / RMC	259.4	227.0	14.3%	14.2%
Others	56.9	43.8	29.8%	22.0%
Total	972.6	908.8	7.0%	6.8%

Breakdown by geographical segment

Western Europe

(M€)	Revenues		Recurring EBITDA		EBITDA		EBIT
	Q1 2011	Q1 2010	Q1 2011	Q1 2010	Q1 2011	Q1 2010	Q1 2011	Q1 2010
France/ Belgium	392.8	325.9	53.8	42.5	53.3	42.6	29.4	19.3
Spain	38.8	44.3	3.0	8.8	3.0	9.0	(1.8)	5.3
Other country*	12.2	17.3	0.3	3.9	0.3	3.9	(0.9)	2.8
Eliminations intra-zone	(4.8)	(4.4)	-	-	-	-	-	-
Total	438.9	383.2	57.0	55.2	56.6	55.5	26.7	27.4

* Greece

North America

(M€)	Revenues		Recurring EBITDA		EBITDA		EBIT
	Q1 2011	Q1 2010	Q1 2011	Q1 2010	Q1 2011	Q1 2010	Q1 2011	Q1 2010
Total	63.9	61.6	(22.0)	(17.2)	(22.3)	(17.2)	(38.9)	(33.8)

Emerging Europe, North Africa & Middle East

(M€)	Revenues		Recurring EBITDA		EBITDA		EBIT
	Q1 2011	Q1 2010	Q1 2011	Q1 2010	Q1 2011	Q1 2010	Q1 2011	Q1 2010
Egypt	167.6	213.7	50.9	61.8	50.9	61.8	34.3	44.1
Morocco	84.9	80.8	36.6	31.0	36.6	31.0	28.2	26.4
Other countries*	25.1	25.1	6.6	2.9	6.7	2.9	3.1	(0.8)
Total	277.6	319.5	94.1	95.7	94.2	95.7	65.6	69.8

* Bulgaria, Turkey (Afyon), Kuwait

Asia

(M€)	Revenues		Recurring EBITDA		EBITDA		EBIT
	Q1 2011	Q1 2010	Q1 2011	Q1 2010	Q1 2011	Q1 2010	Q1 2011	Q1 2010
Thailand	54.2	41.6	10.1	6.0	10.1	5.7	4.7	0.8
India	60.5	39.5	15.5	8.0	15.5	8.0	10.7	4.4
Other countries*	15.6	14.0	(0.8)	0.4	(0.8)	0.4	(3.2)	(1.9)
Total	130.3	95.0	24.8	14.4	24.8	14.1	12.2	3.3

* Chine & Kazakhstan

Cement/clinker trading

(M€)	Revenues		Recurring EBITDA		EBITDA		EBIT
	Q1 2011	Q1 2010	Q1 2011	Q1 2010	Q1 2011	Q1 2010	Q1 2011	Q1 2010
Total	41.3	64.7	2.8	3.0	2.8	3.0	1.9	2.4

Group total

(M€)	Revenues		Recurring EBITDA		EBITDA		EBIT
	Q1 2011	Q1 2010	Q1 2011	Q1 2010	Q1 2011	Q1 2010	Q1 2011	Q1 2010
Others & eliminations*	20.6	(15.2)	(10.1)	(7.3)	(10.1)	(7.3)	(10.7)	(7.9)
Group Total	972.6	908.8	146.6	143.8	146.1	143.9	56.8	61.2

* Others: fuel trading, headquarters & holding companies

***

The results for the first quarter of 2011 of Italcementi and Ciments Français will be illustrated during aConference Call on Friday 6 May 2011 at 3:30 pm. The presentation will be broadcast in audio streaming on the italcementigroup.com and cimfra.com websites.