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Titans Net Drops 65.7 pct in H1

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Net profit for the Titan Group posted a 65.7% drop during the first six months of 2011, compared to the same period in 2010, and reached 23.4 million euro. 

Turnover for the group declined by 18.2%, at 558 million euro, while earnings before interest, tax, depreciation and amortization (EBITDA) declined by 12.4% reaching 141.4 million euro.

According to the group’s press release, the weakening of the Egyptian pound and Turkish Lira, as well as the US$ versus the Euro, led to negative foreign exchange effects decreasing the Group’s profit before tax by €20.3m. At stable exchange rates, the decline in Group turnover would have stood at 14.1% and the decline in EBITDA would have been 6.6%.

The deterioration in operating results is mainly attributed to the sharp decline in construction activity in Greece, in conjunction with the deep and persisting depression of construction activity in the USA. In contrast, Group’s activities in developing countries, particularly in the Eastern Mediterranean region, increased their contribution to Group operating results.

In the course of the first six months of 2011, the price of solid and liquid fuels continued to increase, thereby adversely impacting profitability, with the exceptions of Bulgaria and Greece where the increased disposal of CO2 emission rights allowed the containment of production costs.

As far as the prospects in the second half of 2011 are concerned, the company believes that for Greece they remain adverse. Due to the deterioration of the fiscal crisis and the uncertainty surrounding its resolution, the construction sector – both private and public – is expected to continue its downward trend. Cement demand for the full year is forecast to stand at levels roughly 65% below those of 2006 / 2007. The expected support from the European Union, aiming at kick-starting investments and public works, is not expected to lead to a meaningful improvement in the demand for building materials in the course of the current year.

In the USA, due to the anemic and unstable economic recovery, demand for building materials is expected to remain at depressed levels. The Portland Cement Association recently revised its forecasts downwards once again, thereby placing the sector’s substantial recovery beyond 2012. The new forecasts foresee a lower number of new housing starts than those forecast last quarter and reflect a generally cautious stance as regards the implementation of public works due to the stated goal of curtailing public expenditures as well as the fiscal challenges faced by many States.

In Southeastern Europe, the expansion of Group activities, coupled with the gradual return of the region to growth, are expected to lead to a gradual increase in sales.

In Egypt, developments are pointing, in the short-term at least, towards a decline in demand for building materials, as the effects of the social upheaval gradually become evident in all facets of the country’s economy.

The prospects for Turkey appear positive, where owing to the country’s strong economic development, domestic demand for building materials has increased substantially.

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