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Cementos Portland Valderrivas improves by 30% its international turnover

Exports represent almost 50% of total sales

11/08/2012 | General

Cash flow of the businesses grows 75%, reaching 59 million. Net debt decreases in 6 million since December 2011. The Group agrees with unions the adjustments of Plan NewVal.

Grupo Cementos Portland Valderrivas reached a turnover of 251,4 million Euros in the international area during the first nine months of the year, this means an increase of 30.3% over the same period in 2011. Cement sales increased 36% in Tunisia and 8.6% in  the United States.

International activity is already almost half - the 49.8% - of the total amount of business of the Group - 505 million Euros, that decreased 13.8% hampered by the drastic fall in the consumption of cement in Spain.

The demand for cement has declined a 34.6% in Spain in inter-annual terms, while has grown by 9.8% in the U.S. and by 11% in Tunisia, the two main foreign markets of the Group.

Despite the difficult situation in the cement sector in Spain, between January and September, Cementos Portland Valderrivas rose 75% the cash flow generated by its businesses, up to 59.3 million Euros. This considerable increase is due to the containment of expenditure and investment and to the control of working capital.

Cash generation allowed reducing the net debt of the group in six million from December 2011, which stands in 1.279 million at the end of the third quarter.

Last July 31st, Cementos Portland Valderrivas signed an agreement to refinance its debt which provides a wide margin for its return: four years, extendable to five, in the case of Spain and six years in the United States.

The agreement consists of three parts: the independent refinancing of the debt of Giant –the subsidiary in USA-, the remaining bank debt refinancing and a contribution of 100 million guaranteed by FCC, main shareholder of the Group.

As a result of the dramatic fall in demand in Spain, the Group recorded a loss after tax of 83.3 million Euros in the first nine months of the year, over 7.2 million recorded in the same period of 2011.

However, accounts for the third quarter included a series of non-recurring items, at the level of income before taxes, totaling 65.2 million, including one item of 34 million to adjust the structure of the Group to the situation of the market. Discounted these items, pre-tax losses would go from 127.9 million Euro to 62.7 million Euro.

Plan NewVal

The Group is progressing the implementation of the Plan NewVal 2012-2013, which aims to adapt the productive capacity to the drastic fall in demand in Spain. Currently the application is still better than the initially planned.

At the end of October, the group signed two agreements with the unions to reduce headcounts: the first, signed on 22 October, means an adjustment of 291 jobs in the area of cement, while the second, signed the day 30th of the same month, affects 299 jobs in the businesses of concrete, aggregates, mortar and transport.

It is expected that the implementation of Plan NewVal will generate 80 million of EBITDA (gross operating profit) per year: 50 million by the adequacy of the productive capacity in Spain and 30 million by the optimization of operations in the United States.

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