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Italcementi Cement says recovery further away than expected

Nov, 24 2009

(Milan, Italy) -- Italian cement maker Italcementi said on Monday that recovery would take longer than was previously expected and that some of the cost cuts planned for 2009 would be achieved next year, sending its shares lower.

• 9M net profit down nearly 50 pct
• Forecasts full-year operating profit below 2008 figure
• COO says visibility "quite complicated"
• 205-210 mln euro cost savings in 2009 vs 220 mln plan
• Shares close down 1.6 percent
  

Family-controlled Italcementi, the world's No.5 cement maker, said its nine-month net profit nearly halved and forecast a 2009 operating result lower than 2008.

"Visibility is quite complicated," Chief Operating Officer Giovanni Ferrario said about 2010 during a conference call.

Ferrario said he expected the "negative trend" to continue into 2010 in Italy, France, Belgium, Spain, Greece, Bulgaria and Turkey, referring to volumes and in some cases to prices. These countries contributed to more than half of the group's revenues in the first nine months of 2009.

"We will probably see some delay in recovery compared with previous expectations. But the fundamentals of this business still remain very positive and we will come out of this crisis with much better margins," Ferrario said. "It's just a matter of crossing a difficult period that could be six months, nine months."

Shares in Italcementi ended the session down 1.6 percent at 9.83 euros while the DJ Stoxx construction and materials .SXOP index was up more than 2 percent.

"There were some expectations on the market for a recovery in 2010 given the disastrous 2009," a Milan-based analyst said.

A company executive said during the conference call that the group would achieve cost savings of 205 million to 210 million euros ($307-$314 million) in 2009, against the forecasted 220 million. He said the remainder would be achieved next year. (Reporting by Danilo Masoni; editing by Karen Foster) ($1 = 0.6678 euro).



Source: www.reuters.com