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Titan Shows Signs Of Recovery In U.S. Market

Titan Cement administration expects the confirmation of an assessment made by the US Portland Cement Association (PCA) for a sluggish recovery in the U.S. building materials market.

Last week, the association revised positively its forecasts for 2011-2013, referring to the increase of cement consumption by 2% (from 1.4%) in 2011, by 8.5% (from 4%) in 2012 and by 18.5% (from 16.9%) in 2013. 

PCA estimates upward course of growth for the next three years in the U.S., after a very difficult period (starting in 2007), when the decline of cement consumption reached double digits. 

Although expected, the recovery of the construction industry in the U.S. wasn’t visible last year. In the South-eastern  states, consumption remained low, while Florida market recorded further decline. 

Analysts (Alpha Finance) consider this development positive, however they maintain a negative outlook for the U.S. market because of low sales and a significant decline in prices. Alpha estimates US sales to reach 26% of total sales and 7% of EBITDA for 2011, compared with 23% and 1% in 2010 respectively.  

Moreover, it expects operating profit of €21m from US in 2011 and €35m in 2012. 

In the first two months of the year, the group recorded a rise in sales in the US, while the analysts believe that Titan has already faced the worst in America and the administration hopes for an offset of the negative developments in Egypt and Libya.

In the Athens Exchange, the group is valued at €1.3b, with its share rising by 11.5% since the beginning of the year. Estimated PE is at 12.1 for 2011.
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