Furthermore, the Group says the first nine months of 2016 saw a significant improvement in its trading performance, reflecting the growth of the U.S. market and the improvement of results in Egypt.
Titan Group’s Q3 2016 profit, after minority interests and the provision for taxes, stood at €112.7 million – up notably from €12 million in Q3 2015. Results were said to be favourably affected by the recording of deferred tax benefits in the US, but were negatively impacted by a €6.4 million provision taken in Egypt for FX losses arising from outstanding balances in foreign currency between the Egyptian subsidiaries and other Group affiliates.
The Group’s profit margin for the first nine months of 2016 was also encouraging. After minority interests and the provision for taxes, profit stood at €121.9 million - compared to €36.2 million in the first nine months of 2015. This was said to be largely due to a deferred tax recognition of €79.4 million in the U.S. associated with previously unrecognized carry-forward net operating losses, generated in previous years. The Group’s Q1-Q3 turnover was €1.124 billion - a 9.2% increase compared to the same period of 2015
Titan Group says that for the remainder of 2016, the same trends evident in the first nine months of 2016 are expected to continue. At this point in time, the recovering U.S. market is the main motor of growth and profitability for Titan, while Egypt is also recovering due to the growth in market demand as well as higher utilisation and increased cost competitiveness of Group plants. The recovery of the construction industry in the U.S. is expected to continue beyond the current year. Mid-term trends appear positive both for the residential and commercial sectors as well as for infrastructure projects. The growth in demand for building materials, coupled with the benefits of the Group’s investment program, strengthen Titan’s position in the US market. Demand in Greece is expected to remain at extremely low levels, similar to those of 2015. Greek cement production is expected, once again in 2016, to be largely geared towards exports.
In South East Europe, the Titan Group says economic recovery is still being affected by the economic weakness of Eurozone neighbours, which are the region’s main trading and investment partners. Although signs of recovery are evident in certain countries, construction in the region overall lacks momentum. In Egypt, demand for building materials is projected to continue to grow. The Group, by completing the investments for the utilisation of solid and alternative fuels at its plants, has ensured fuel sufficiency and improved its cost structure. It should be noted however, that the anticipated agreement with the IMF, coupled with the devaluation of the currency, creates uncertainties and poses risks for the short-term. In Turkey, demand currently appears unaffected by recent political events.
Elsewhere, in Brazil, which is undergoing a severe political and economic crisis, Titan Group expects cement demand to continue declining for the remainder of 2016.
