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In addition, the impact of low shale gas prices is easing

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Cement companies’ Q1 results reveal mixed trends

May 17 Fitch Ratings says that the Q112 results canada goose clearance sale of the main cheap canada goose uk rated Western European cement buy canada goose jacket producers, Holcim Ltd ( Lafarge SA ( and HeidelbergCement AG ( had mixed indications.

The trend in Western European markets remained negative, partly due to harsh weather conditions during February, which depressed cement volumes sales. While Fitch expects volumes to improve, the outlook in the region remains difficult with uneven trends across different countries and margins still under pressure.

Positive news came from the North American cement market, where the trend is probably more favourable than Fitch was anticipating at the start of the year. The agency was not expecting any major recovery in the market but Q112 results for the major rated cement producers showed good progression in volume sales, with double digit growth. However, this volume improvement is largely attributable to more favourable weather conditions in the quarter and is unlikely to be maintained for the rest of the year. Prices are also rising, with some price hikes already passed in Q112 and others to take effect from Q212. In addition, the impact of low shale gas prices is easing energy cost inflation. If these trends continue, profitability in the region will be better than anticipated.

Fitch notes that a moderate improvement in the US and Canadian markets would be rating neutral, due to the relatively low weight of North America on the consolidated EBITDA of the Western European cement producers.

The trend is also slightly positive for some emerging markets, especially in Asia and Latin America. As anticipated by Fitch, volume growth continues to be robust, but cost inflation remains the main issue. In Q112, the price trend was also favourable, with price increases largely offsetting cost inflation. In addition, the strong volume increase allowed operating margins to improve in absolute terms for all the producers in most of the emerging markets. However, in some cases, profitability (operating profit margin) deteriorated. In Fitch view, this is the main concern Canada Goose sale for the sector. Q1 volume and margins are usually Canada Goose Online not particularly meaningful, due to seasonality. However, the trend in Canada Goose Parka profitability could canada goose be a signal the companies will canada goose uk shop need further price hikes in order to uk canada goose offset Canada Goose Coats On Sale cost inflation and preserve operating profits in the next months.

Overall, Fitch believes that canadian goose jacket while Canada Goose online some positive signals were evident cheap Canada Goose from interim results, uk canada goose outlet the outlook buy canada goose jacket cheap remains broadly unchanged. The ability of single companies to cut costs and gain canada goose factory sale efficiencies will be crucial to preserve operating profits and cash flows. Fitch expects canada goose black friday sale all the rated companies canada goose uk outlet to maintain very tight capex policies and control leverage. canada goose store Even though the operating performance in some regions could be Canada Goose Outlet marginally better canada goose coats on sale than anticipated, Fitch does not expect any canada goose clearance significant improvement in the credit metrics of the rated companies. Therefore, potential positive rating actions in the sector are subject to a stronger recovery in 2013, especially in Western cheap canada goose Europe, canada goose coats where canada goose uk black friday visibility is Canada Goose Jackets still poor.

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