Quarterly Report • Jul 28, 2022
Quarterly Report
Open in ViewerOpens in native device viewer
1 January – 30 June 2022
Interim Condensed Financial Statements of Titan Cement Group
| Declaration by the persons responsible……………………………………………………………… | 2 |
|---|---|
| Financial performance overview………………………………………………………………………… | 3 |
| Report on review of interim financial information…………………………………………… | 7 |
| Interim condensed consolidated financial statements………………………………………. |
8 |
| Notes to the interim condensed consolidated financial statements…………………… |
14 |
The Interim Condensed Consolidated Financial Statements, presented through pages 8 to 27, have been approved by the Board of Directors on 27 th of July 2022.
Chairman of the Board of Directors Managing Director and Group CFO Efstratios - Georgios (Takis) Arapoglou Michael Colakides
Company CFO Financial Consolidation Director Grigorios Dikaios Athanasios Danas
We certify, to the best of our knowledge, that:
Chairman of the Board of Directors Managing Director and Group CFO Efstratios - Georgios (Takis) Arapoglou Michael Colakides
Helped by stronger Q2 2022 performance, the Group's consolidated revenue for H1 2022 surpassed the €1 billion threshold and reached €1,035.5m, up 26.1% versus the first half of 2021. This reflects solid demand across most markets coupled with price increases across countries and products. Top line growth was supported by stronger US\$ and US\$-linked currencies (in local currencies growth was 21.3%). EBITDA increased by 7.1% to €92.7m in Q2, while for H1 2022 it reached €139.1m, down by 2.5%, held back by the spike in energy costs and freight rates, as the effect of price increases was not yet fully in place in Q1. Net profit after taxes and minority interests was €43.9m in Q2, 2.9% higher than Q2 2021, while for H1 it reached €45.2m vs €58.0m last year, due to the weak Q1 result.
In Q2 2022, sales continued strongly in all regions of operation. The Group was able to move forward with price increases, announced at the end of 2021 and in the first half of 2022, in order to offset the continuously rising energy and input costs. The Group is constantly monitoring various input costs amidst this volatile environment and is following a dynamic pricing policy, safeguarding profitability levels.
Titan operations in Q2 2022 in the US recorded a solid performance, supporting the view that market fundamentals are well in place underpinning demand in a strong economy. In both of the Group's main geographies demand remained at high levels. Residential build-up and continued infrastructure activity supported demand in the Mid-Atlantic, while Florida's economy is racing ahead at full steam. Florida's residential demand is burgeoning, while commercial resurgence reflects the move of considerable business activity to the region. A growing number of infrastructure investment programs are underway in both Florida and Mid Atlantic.
Amidst this positive environment, the Group has successfully realized price increases this year and managed to gradually restore profitability with Q2 EBITDA at €42.8m coming close to Q2 of 2021 (€44.9m). As the last implementation of price increases took place in June, further margin recovery is expected to materialize in Q3.
Wide adoption of type IL cement and generally lower-clinker cement products improve the Group's financial and environmental results.
Revenue in the USA recorded a 23.4% increase to €595.4m during the first six months of 2022 (11.7% increase in US \$ terms), while EBITDA reached €66.8m versus €83.4m, a 20% drop vs H1 2021. The discrepancy is due to the relatively delayed effect of implemented price increases compared to the earlier and persistent pressure of high input costs, such as energy, logistics, labor, and raw materials.
The Greek domestic market continued evolving well in the first half of the year with increased volume of sales. Two successive price increases - one in the last quarter of 2021 and a second one towards the end of the first quarter of the year, have been implemented to cover the cost increases recorded across production inputs. Similarly, on the export front, price increases have been implemented across all export destinations in order to cover higher production and freight costs. In terms of activity, the large urban clusters of Athens and Thessaloniki as well as those of Crete in the periphery account for the lion's share of activity with major projects starting to pull in volumes while renovation and small private projects are somewhat softer reflecting the uncertainties of the current cost environment. On the operational front, the group has continued pursuing its decarbonization and digitalization initiatives across installations in order to reduce its carbon footprint as well as to navigate more efficiently through the turbulence generated by the tight cost environment.
Total revenue for region Greece and Western Europe in the first half of 2022 grew by 21.3% to €158.3m while EBITDA improved to €16.1m versus €14.8m.
The region of Southeast Europe has exhibited high revenue growth in the first half of the year, despite volatile political circumstances, with variations across different markets. Tight supply conditions in the region coupled with significant production input cost increases served as the backdrop for price increases in all markets and have helped maintaining profitability close to previous year in most of the countries in the region. Real estate activity continues, also serving as a safe haven for investors in the current volatile cost and interest rate environment. Infrastructure projects continue to contribute a significant part of cement consumption in most countries in the region. Substantial progress has been made in the Group's decarbonization efforts through the introduction of lower clinker cement types across more countries. In order to improve its efficiency and manage its cost base, the Group is investing further in alternative fuel utilization, debottlenecking, alternative energy sources as well as in digitalizing further its operations.
Revenue for the region as a whole in the first semester of 2022 increased by 27.5% to €168.6m while EBITDA increased by 4.2% to €43.8m.
In Egypt, construction activity remains well-oriented despite the country's macroeconomic challenges. The pricing environment has significantly improved, retaining the momentum achieved as a result of the rationalization of the country's domestic supply situation, which is still in place. Public housing development and infrastructure projects already underway continue to account for the bulk of cement demand. The country is also in step with the overall trend towards the adoption of more blended cement types, a positive development in ameliorating both the carbon footprint and the cost base.
In Turkey, the economic environment has rapidly deteriorated with the country reaching hyper-inflation levels, not seen in 20 years. Domestic volumes have declined as a result of severely curtailed public investment activity and a particularly harsh winter at the beginning of the year weighing on first half volumes. Amidst this predicament, prices have increased to cover inflation as producers moved swiftly to mitigate their risks. Moreover, the current macroeconomic turmoil has elevated real estate into the most preferred investment, spurring a surge in new real estate developmentsto accommodate needsfor relative stability. IAS 29 for hyperinflation was applied in Turkey, increasing depreciation cost by €1.6m, tax charged by €1.7m and realizing an equity gain of €14.6m. A goodwill impairment of €10.4m was recognized by management in order to reverse the gain in goodwill that resulted by indexation.
Total revenue in the Eastern Mediterranean reached €113.1m in the first half of 2022. an increase of 48.9% year on year, while EBITDA increased significantly, reaching €12.4m versus €2.4m.
In Brazil, the testing state of the national economy, marked by high interest rates, high inflation, and the compression of private disposable income all affected cement consumption which declined by 2.7% in the first half of the year. As in other markets, input costs increased across the board, in terms of energy, raw materials and transport while cement price increases rose at a slower pace. On the other hand, there is a drive, especially ahead of this year's general elections in October, in public housing and infrastructure investments, as well as government efforts to address affordability concerns.
In the first half of the year, Apodi posted an increase in revenue to €50.5m, versus €36.7m in the first half of 2021, while EBITDA reached €3.6m versus €8.8m in 2021.
Operating free cash flow for the first six months of the year recorded a net outflow of €49m compared to a net inflow of €60.5m in the first half of 2021. Cash flow generation has been affected by the extensive CAPEX program (€96m in H1 2022 vs €54m in2021) in progress, mainly in the US, as well as by fuel inventories purchased at higher prices compared to last year and trade receivables at higher levels, as a result of higher revenue levels.
Group's net finance costs in H1 2022 were reduced to €14.6m, while the Group net debt at the end of the first six months of 2022 was €795m, higher by €81m from the end of 2021.
On March 16, 2022, the Board of Directors decided the return of capital of €0.50 per share to all shareholders of the Company on record on April 28, 2022, which was paid on July 5th , 2022.
The Group has been implementing consecutive share buy-back programs and in the period from January 1st until June 30th, 2022, has purchased 943,076 shares on Euronext Brussels and the Athens Exchange (ATHEX) for a total consideration of €12.2 million. On June 30th, the Group owned treasury shares representing 3.10% of total voting rights. A new buy-back program of €10m was decided by the Board of Directors on July 27th 2022. The new program will begin following the end of the current running program and will be up to €10 million with a duration of up to six months. TCI will keep the market fully informed of the progress of the relevant transactions in line with applicable regulations.
The macroeconomic turmoil manifesting itself since the beginning of this year has elevated volatility and unpredictability to key determining factors; much depends on how the war evolves in Ukraine, its duration, and its aftermath on the global economy. At the same time, central monetary authorities around the world are facing the dilemma of preventing the economy from further overheating while avoiding stomping out growth altogether. In this environment, TITAN is focusing on the levers at its disposal to safeguard production, protect margins, improve efficiencies and continue with its carbon mitigation strategies. Decarbonization projects are underway in all regions, lower-clinker types of cement are being rolled out in all markets and meeting with very good uptake, while digitalization investments across the stages of production translate into cost savings and improved production output. As cost pressures are expected to persist across geographies, the Group will continue to address global cost headwinds by adjusting pricing, in a dynamic manner in order to safeguard its performance.
In the US, fundamentals remain solid. Residential activity is robust, despite concerns of rising interest rates and affordability, while the supply of cement is tight. With state budgets at historic highs, construction activity from public projects is expected to continue until the new infrastructure package starts in 2023 to boost infrastructure spending further. It should be emphasized that the Group is present in some of the USA's top growing regions which outpace the rest of the US economy. TITAN, especially after the current round of investments in the USA, will be in a prime position to capitalize on the growth of the market.
European economies remain more affected by the crisis owing to their geographical proximity and more direct exposure to the disrupted energy networks. While Europe is stepping up its efforts to address its energy security and maintain growth rates in the region, the outlook for construction remains positive but does carry significant uncertainty. The ongoing war and duration of steep energy costs could impact underlying demand in the second half.
In Greece activity should continue to be supported by the large investment projects now commenced which offer a supply horizon for several years ahead. Moreover, with the conclusion of what appears to be another strong tourism season, projects related to the sector should start by the end of the season in preparation for the following year. Market demand is subject to uncertainties related to the macroeconomic developments. Lack of available
skilled labor in construction sites may be a factor affecting the pace of works, a phenomenon alas recorded in markets across Europe and the US.
Activity in southeastern Europe is expected to continue to reflect differences across markets while overall levels of activity should be maintained. The evolution of costs in the second half of the year will very much determine overall levels of profitability as well. Otherwise, the Group will continue to utilize its strategic regional positioning to serve market needs in the most efficient manner.
In Egypt, the market should withstand the macroeconomic challenges considering the importance of the construction sector in this large country. Moreover, a continuation of the cement production quota, not finalized yet, safeguards healthy prices and the recovery of profitability levels.
In Turkey, volumes will continue to decline so long as the economy does not stabilize. Elections currently slated to take place in 2023 might offer some respite, while the market has been adept in managing the crisis through both dynamic pricing and the full exploitation of Turkey's considerable export outlet potential.
Brazil is another country with a large and young population and feeling the brunt of inflationary pressures. The cement market may soften somewhat, especially as the government wishes to maintain the momentum of its housing program and ameliorate affordability concerns in what is a critical election year.
Titan International SA Rue de la Loi 23, bte 4, 7ième étage 1040 BRUXELLES
For the attention of the Board of Directors
We have reviewed the accompanying consolidated condensed statement of financial position of Titan Cement International SA and its subsidiaries as of 30 June 2022 and the related consolidated condensed statement of profit and loss and other comprehensive income, changes in equity and cash flows for the six-month period then ended, as well as the explanatory notes. The board of directors is responsible for the preparation and presentation of this consolidated condensed financial information in accordance with IAS 34, as adopted by the European Union. Our responsibility is to express a conclusion on this consolidated condensed financial information based on our review.
We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity." A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated condensed financial information is not prepared, in all material respects, in accordance with IAS 34, as adopted by the European Union.
Diegem, 27 July 2022
The statutory auditor PwC Reviseurs d'Entreprises SRL/ Bedrijfsrevisoren BV Represented by
Dider Delanoye Réviseur d'Entreprises / Bedrijfsrevisor
| (all amounts in Euro thousands) | For the six months ended 30/6 | |
|---|---|---|
| 2022 | 2021 | |
| Notes | ||
| Revenue 5 |
1,035,500 | 821,068 |
| Cost of sales | -869,822 | -661,553 |
| Gross profit | 165,678 | 159,515 |
| Other operating income | 7,729 | 5,036 |
| Administrative expenses | -87,127 | -70,466 |
| Selling and marketing expenses | -13,175 | -12,400 |
| Net impairment losses on financial assets | -207 | -536 |
| Other operating expenses | -3,826 | -4,157 |
| Operating profit before gain on goodwill restatement in hyperinflationary economies and impairment losses on |
||
| goodwill | 69,072 | 76,992 |
| Gain on goodwill restatement in hyperinflationary economies | 10,390 | - |
| Impairment losses on goodwill | -10,390 | - |
| Operating profit | 69,072 | 76,992 |
| Finance income | 2,874 | 3,393 |
| Finance costs | -17,449 | -19,111 |
| (Loss)/gain from foreign exchange differences | -1,921 | 3,159 |
| Gain on net monetary position in hyperinflationary economies | 4,248 | - |
| Net finance costs | -12,248 | -12,559 |
| Share of (loss)/profit of associates and joint ventures 11 |
-2,800 | 1,144 |
| Profit before taxes | 54,024 | 65,577 |
| Income tax expense 7 |
-8,617 | -7,565 |
| Profit after taxes | 45,407 | 58,012 |
| Attributable to: | ||
| Equity holders of the parent | 45,202 | 57,961 |
| Non-controlling interests | 205 | 51 |
| 45,407 | 58,012 | |
| Basic earnings per share (in €) | 0.6257 | 0.7551 |
| Diluted earnings per share (in €) | 0.6249 | 0.7520 |
| (all amounts in Euro thousands) | For the six months ended 30/6 | |
|---|---|---|
| 2022 | 2021 | |
| Notes | ||
| Profit after taxes | 45,407 | 58,012 |
| Other comprehensive income: | ||
| Items that may be reclassified to income statement | ||
| Exchange differences on translation of foreign operations 14 |
57,871 | 10,010 |
| Currency translation differences on transactions designated as part of | ||
| net investment in foreign operation | -1,567 | 2,629 |
| Gains on cash flow hedges | 27,914 | 553 |
| Income tax relating to these items 7 |
-5,361 | -764 |
| Items that will not be reclassified to income statement | ||
| Effect due to changes in tax rates | - | -45 |
| Other comprehensive income for the period net of tax | 78,857 | 12,383 |
| Total comprehensive income for the period net of tax | 124,264 | 70,395 |
| Attributable to: | ||
| Equity holders of the parent | 118,068 | 72,684 |
| Non-controlling interests | 6,196 | -2,289 |
| 124,264 | 70,395 |
| (all amounts in Euro thousands) | 30/06/2022 | 31/12/2021 | |
|---|---|---|---|
| Assets | Notes | ||
| Property, plant and equipment | 8 | 1,677,943 | 1,545,382 |
| Investment properties | 10,976 | 10,980 | |
| Goodwill | 9 | 297,689 | 271,986 |
| Intangible assets | 10 | 92,593 | 91,444 |
| Investments in associates and joint ventures | 11 | 97,836 | 88,753 |
| Derivative financial instruments | 10,009 | 2,488 | |
| Receivables from interim settlement of derivatives | 12 | 15,855 | 6,185 |
| Other non-current assets | 17 | 16,893 | 18,556 |
| Deferred tax assets | 7 | 6,049 | 8,867 |
| Total non-current assets | 2,225,843 | 2,044,641 | |
| Inventories | 18 | 364,637 | 305,131 |
| Receivables and prepayments | 19 | 295,612 | 236,344 |
| Income tax receivable | 22,249 | 1,611 | |
| Derivative financial instruments | 12 | 3,990 | 1,715 |
| Receivables from interim settlement of derivatives | 12 | 11,434 | 9,079 |
| Cash and cash equivalents | 87,897 | 79,882 | |
| Total current assets | 785,819 | 633,762 | |
| Assets held for sale | 8 | - | 238 |
| Total Assets | 3,011,662 | 2,678,641 | |
| Equity and Liabilities | |||
| Equity and reserves attributable to owners of the parent | 1,425,859 | 1,321,626 | |
| Non-controlling interests | 27,886 | 15,260 | |
| Total equity (a) | 1,453,745 | 1,336,886 | |
| Long-term borrowings | 12 | 680,250 | 641,461 |
| Long-term lease liabilities | 48,694 | 46,004 | |
| Derivative financial instruments | 12 | 15,850 | 6,185 |
| Payables from interim settlement of derivatives | 10,184 | 1,070 | |
| Deferred tax liability | 7 | 133,694 | 113,604 |
| Retirement benefit obligations | 21,821 | 22,063 | |
| Provisions | 53,509 | 56,001 | |
| Non-current contract liabilities | 1,605 | 1,692 | |
| Other non-current liabilities | 10,054 | 12,849 | |
| Total non-current liabilities | 975,661 | 900,929 | |
| Short-term borrowings | 12 | 139,592 | 89,242 |
| Short-term lease liabilities | 13,890 | 16,378 | |
| Derivative financial instruments | 12 | 14,496 | 8,742 |
| Payables from interim settlement of derivatives | 12 | 5,669 | - |
| Trade and other payables | 20 | 383,431 | 302,611 |
| Current contract liabilities | 13,085 | 9,998 | |
| Income tax payable | 1,157 | 1,544 | |
| Provisions | 10,936 | 12,311 | |
| Total current liabilities | 582,256 | 440,826 | |
| Total liabilities (b) | 1,557,917 | 1,341,755 | |
| Total Equity and Liabilities (a+b) | 3,011,662 | 2,678,641 |
| (all amounts in Euro thousands) | Attributable to equity holders of the parent | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Ordinary shares |
Share premium |
Share options |
Ordinary treasury shares |
Other reserves (note 14) |
Retained earnings |
Total | Non controlling interests |
Total equity | |
| Balance at 31 December 2020 | 1,159,348 | 5,974 | 5,307 | -124,120 | -878,066 | 1,074,250 | 1,242,693 | 23,990 | 1,266,683 |
| Change in accounting policy | - | - | - | - | 2,574 | 6,095 | 8,669 | 4 | 8,673 |
| Restated Balance at 31 December 2020 | 1,159,348 | 5,974 | 5,307 | -124,120 | -875,492 | 1,080,345 | 1,251,362 | 23,994 | 1,275,356 |
| Profit for the period | - | - | - | - | - | 57,961 | 57,961 | 51 | 58,012 |
| Other comprehensive income/(loss) | - | - | - | - | 14,723 | - | 14,723 | -2,340 | 12,383 |
| Total comprehensive income/(loss) for the period | - | - | - | - | 14,723 | 57,961 | 72,684 | -2,289 | 70,395 |
| Deferred tax on treasury shares held by subsidiary | - | - | - | - | -10,196 | - | -10,196 | - | -10,196 |
| Cancellation of treasury shares (note 13) | - | - | - | 92,820 | -65,318 | -27,502 | - | - | - |
| Distribution of reserves | - | - | - | - | -30,780 | - | -30,780 | - | -30,780 |
| Dividends distributed | - | - | - | - | - | - | - | -390 | -390 |
| Sale - disposal of treasury shares for option plan (note 13) |
- | - | - | 1,860 | - | -1,034 | 826 | - | 826 |
| Tax expenses due to share capital transactions | - | - | - | - | - | -767 | -767 | - | -767 |
| Share based payment transactions | - | - | 430 | - | - | 430 | - | 430 | |
| Deferred tax adjustments on revaluation reserves | - | - | - | - | -213 | -414 | -627 | -22 | -649 |
| Acquisition of non-controlling interest | - | - | - | - | 9 | -3 | 6 | -11 | -5 |
| Transfers among reserves | - | - | -1,996 | - | 6,803 | -4,807 | - | - | - |
| Restated Balance at 30 June 2021 | 1,159,348 | 5,974 | 3,741 | -29,440 | -960,464 | 1,103,779 | 1,282,938 | 21,282 | 1,304,220 |
| (all amounts in Euro thousands) | Attributable to equity holders of the parent | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Ordinary shares |
Share premium |
Share options |
Ordinary treasury shares |
Other reserves (note 14) |
Retained earnings |
Total | Non controlling interests |
Total equity |
|
| Balance at 31 December 2021 | 1,159,348 | 5,974 | 3,913 | -31,773 | -1,166,698 | 1,350,862 | 1,321,626 | 15,260 | 1,336,886 |
| Hyperinflation restatement | - | - | - | - | 35,699 | - | 35,699 | 6,828 | 42,527 |
| Restated balance at 1 January 2022 | 1,159,348 | 5,974 | 3,913 | -31,773 | -1,130,999 | 1,350,862 | 1,357,325 | 22,088 | 1,379,413 |
| Profit for the period | - | - | - | - | - | 45,202 | 45,202 | 205 | 45,407 |
| Other comprehensive income | - | - | - | - | 72,866 | - | 72,866 | 5,991 | 78,857 |
| Total comprehensive income for the period | - | - | - | - | 72,866 | 45,202 | 118,068 | 6,196 | 124,264 |
| Deferred tax on treasury shares held by subsidiary | - | - | - | - | 544 | - | 544 | - | 544 |
| Distribution of reserves | - | - | - | - | -38,108 | - | -38,108 | - | -38,108 |
| Dividends distributed | - | - | - | - | - | - | - | -398 | -398 |
| Purchase of treasury shares (note 13) | - | - | - | -12,196 | - | - | -12,196 | - | -12,196 |
| Sale - disposal of treasury shares for option plan | |||||||||
| (note 13) | - | - | - | 432 | - | -206 | 226 | - | 226 |
| Transfer among reserves (note 13) | -200,000 | - | -1,663 | - | 211,900 | -10,237 | - | - | - |
| Balance at 30 June 2022 | 959,348 | 5,974 | 2,250 | -43,537 | -883,797 | 1,385,621 | 1,425,859 | 27,886 | 1,453,745 |
| (all amounts in Euro thousands) | For the six months ended 30/6 | |||
|---|---|---|---|---|
| 2022 | 2021 | |||
| Cash flows from operating activities Notes |
||||
| Profit after taxes | 45,407 | 58,012 | ||
| Depreciation and amortization of assets 8,10 |
69,999 | 65,599 | ||
| Impairment of goodwill 9 |
10,390 | - | ||
| Interest and related expenses | 17,122 | 15,439 | ||
| Provisions | 5,103 | 2,104 | ||
| Hyperinflation adjustments | -14,841 | - | ||
| Other non-cash items | 8,410 | 3,039 | ||
| Income tax paid | -8,969 | -4,037 | ||
| Changes in working capital | -94,140 | -29,350 | ||
| Net cash generated from operating activities (a) | 38,481 | 110,806 | ||
| Cash flows from investing activities | ||||
| Payments for property, plant and equipment 8 |
-92,097 | -49,965 | ||
| Payments for intangible assets 10 |
-4,364 | -4,364 | ||
| Payments for other investing activities | -1,380 | -91 | ||
| Proceeds from sale of PPE, intangible assets and investment property 8 |
974 | 1,506 | ||
| Proceeds from dividends | 27 | 47 | ||
| Interest received | 294 | 320 | ||
| Net cash flows used in investing activities (b) | -96,546 | -52,547 | ||
| Cash flows from financing activities | ||||
| Acquisition of non-controlling interests | - | -40,817 | ||
| Payments due to share capital transactions | - | -767 | ||
| Dividends paid | -296 | -289 | ||
| Payments for shares bought back | -12,196 | - | ||
| Proceeds from sale of treasury shares | 226 | 826 | ||
| Interest and other related charges paid | -15,511 | -18,133 | ||
| Principal elements of lease payments | -8,599 | -8,254 | ||
| Proceeds from borrowings and derivative financial instruments | 208,848 | 121,070 | ||
| Payments of borrowings and derivative financial instruments | -105,882 | -226,769 | ||
| Net cash flows from/(used in) financing activities (c) | 66,590 | -173,133 | ||
| Net increase/(decrease) in cash and cash equivalents (a)+(b)+(c) | 8,525 | -114,874 | ||
| Cash and cash equivalents at beginning of the year | 79,882 | 206,438 | ||
| Effects of exchange rate changes | -510 | 2,131 | ||
| Cash and cash equivalents at end of the period | 87,897 | 93,695 |
| 1. General information | 15 |
|---|---|
| 2. Basis of preparation and summary of significant accounting policies | 15 |
| 3. Estimates | 18 |
| 4. Seasonality of operations | 18 |
| 5. Operating segment information | 19 |
| 6. Number of employees | 19 |
| 7. Income tax | 20 |
| 8. Property, plant and equipment | 20 |
| 9. Goodwill | 21 |
| 10. Intangible assets | 21 |
| 11. Investments in associates and joint ventures | 21 |
| 12. Financial instruments and fair value measurement | 22 |
| 13. Share capital and premium | 24 |
| 14. Other reserves | 25 |
| 15. Return of capital | 26 |
| 16. Contingencies and commitments | 26 |
| 17. Other non-current assets | 27 |
| 18. Inventories | 27 |
| 19. Receivables and prepayments | 27 |
| 20. Trade and Other Payables | 27 |
| 21. Events after the reporting period | 27 |
| 22. Covid-19 implications | 27 |
| 23. Principal exchange rates | 27 |
TITAN Cement International S.A. (the Company or TCI) is a société anonyme incorporated under the laws of Belgium. The Company's corporate registration number is 0699.936.657 and its registered address is Rue de la Loi 23, 7th floor, box 4, 1040 Brussels, Belgium, while it has established a place of business in the Republic of Cyprus in the address Andrea Zakou 12 & Michail Paridi str, MC Building, 2404 Egkomi, Nicosia, Cyprus. The Company's shares are traded on Euronext Brussels, with a parallel listing on Athens Stock exchange and Euronext Paris.
The Company and its subsidiaries (collectively the Group) are engaged in the production, trade and distribution of a wide range of construction materials, including cement, concrete, aggregates, cement blocks, dry mortars and fly ash. The Group operates primarily in Greece, the Balkans, Egypt, Turkey, the USA and Brazil.
These interim condensed consolidated financial statements (the financial statements) were approved for issue by the Board of Directors on 27 July 2022.
These financial statements for the six-month period ended 30 June 2022 have been prepared by management in accordance with International Accounting Standard (IAS) 34 "Interim Financial Reporting".
The financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2021.
However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual group financial statements.
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2021, except for the application of the IAS 29 "Financial Reporting in Hyperinflationary Economies" and the new or revised standards, amendments and/or interpretations that are mandatory for the periods beginning on or after 1 January 2022.
The Turkish economy was designated as hyperinflationary from June 2022. As a result, IAS 29 "Financial Reporting in Hyperinflationary Economies" has been applied to the Group subsidiaries (Adocim Cimento Beton Sanayi ve Ticaret A.S. and Adocim Marmara Cimento Beton Sanayi ve Ticaret A.S.), whose functional currency is the Turkish Lira, and they prepare financial statements based on a historical cost approach. IAS 29 requires to report the results of the Group's operations in Turkey, as if these were highly inflationary as of 1 January 2022. Specifically, IAS 29 requires:
The financial statements of Group subsidiaries, whose functional currency is the currency of a hyperinflationary economy, are adjusted for inflation and then translated into euros. Prior year comparatives have not been restated for hyperinflation in the consolidated financial statements. The difference between the closing balance of Group's equity on 31.12.2021 and its opening balance on 01.01.2022 was recognised in equity. Any difference from the ongoing application of re-translation to closing exchange rates and hyperinflation adjustments will be recognised in other comprehensive income.
In the consolidated income statement for the six months ended on 30.6.2022, the Group recognized a total gain on net monetary position of €17.4 mil., including current period's credit of goodwill's inflation of €10.4 mil. in operating profit, €2.8 mil. in cost of sales and the remaining amount of €4.2 mil. in net finance cost.
On the application of IAS 29, the Group used the conversion coefficient derived from the consumer price index published by TurkStat (TUIK). The conversion coefficient was 977.90 and 686.95 on 30.6.2022 and 31.12.2021 respectively.
The following amendments to standards are mandatory for the first time for the financial year beginning 1 January 2022 and have been endorsed by the European Union:
The Group had either no impact or an immaterial impact from the adoption of the aforementioned amendment of standards.
The following new standard and amendments have been issued, are not mandatory for the first time for the financial year beginning 1 January 2022 but have been endorsed by the European Union:
The Group is currently assessing possible impacts in its financial statements from the adoption of the aforementioned standard or/and amendment of standards.
The following amendments have been issued, but are not mandatory for the first time for the financial year beginning 1 January 2022 and have not been endorsed by the European Union:
The preparation of the interim condensed consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and consequently the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
Any update in estimates of specific topics is included in the related note of these consolidated interim financial statements.
The Group is a supplier of cement, concrete, aggregates and other building materials. The demand for these products is seasonal in temperate countries such as in Europe and North America. Therefore, the Group generally records lower revenues and operating profits during the first and fourth quarters when adverse weather conditions are present in the northern hemisphere. In contrast, sales and profitability tend to be higher during the second and third quarters, as favorable weather conditions support construction activity.
For management information purposes, the Group is structured in five operating segments: Greece and Western Europe, North America, South Eastern Europe, Eastern Mediterranean and Joint Ventures. Each operating segment is a set of countries. The aggregation of countries is based mainly on geographic position.
Each region has a regional Chief Executive Officer (CEO) who is a member of the Group Executive Committee and reports to the Group's CEO. In addition, the Group's finance department is organized by region for effective financial control and performance monitoring.
Management monitors the operating results of its business units separately for the purpose of making decisions, allocating resources and assessing performance. Segment performance is evaluated based on earnings before interest, taxes, depreciation, amortization & impairment (EBITDA). EBITDA calculation includes the operating profit plus depreciation, amortization and impairment of tangible and intangible assets and amortization of government grands.
| (all amounts in Euro thousands) | Greece and Western Europe |
North America | South Eastern Europe | Eastern Mediterranean | Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Period from 1/1-30/6 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| Gross revenue | 190,784 | 159,817 | 595,440 | 482,333 | 168,647 | 132,258 | 115,241 | 75,941 | 1,070,112 | 850,349 |
| Inter-segment revenue | -32,473 | -29,279 | - | - | - | -2 | -2,139 | - | -34,612 | -29,281 |
| Revenue from external customers |
158,311 | 130,538 | 595,440 | 482,333 | 168,647 | 132,256 | 113,102 | 75,941 | 1,035,500 | 821,068 |
| Earnings before interest, taxes, depreciation, amortization and impairment (EBITDA) |
16,055 | 14,777 | 66,826 | 83,414 | 43,813 | 42,039 | 12,377 | 2,361 | 139,071 | 142,591 |
| Depreciation, amortization and impairment of tangible and intangible assets |
-11,580 | -10,950 | -36,359 | -32,571 | -12,062 | -12,665 | -9,998 | -9,413 | -69,999 | -65,599 |
| Operating profit before gain on goodwill restatement in hyperinflationary economies and impairment losses on goodwill |
4,475 | 3,828 | 30,467 | 50,843 | 31,751 | 29,374 | 2,379 | -7,053 | 69,072 | 76,992 |
| ASSETS | Greece and Western Europe South Eastern Europe Eastern Mediterranean |
North America | Total | |||||||
| 30/6/2022 | 31/12/2021 | 30/6/2022 | 31/12/2021 | 30/6/2022 | 31/12/2021 | 30/6/2022 | 31/12/2021 | 30/6/2022 | 31/12/2021 | |
| Total assets of segments excluding joint ventures |
598,482 | 549,401 | 1,319,879 | 1,133,309 | 478,503 | 467,146 | 523,954 | 447,222 | 2,920,818 | 2,597,078 |
| Investment in joint ventures | 90,844 | 81,563 | ||||||||
| Total assets | 3,011,662 | 2,678,641 | ||||||||
| LIABILITIES |
Net finance costs, and other income/loss are not allocated to individual segments as the underlying instruments are managed on a Group basis.
| (all amounts in Euro thousands) | For the six months ended 30/6 |
|||
|---|---|---|---|---|
| 2022 | 2021 | |||
| Operating profit | 69,072 | 76,992 | ||
| Net finance costs | -12,248 | -12,559 | ||
| Share of profit of associates | 726 | - | ||
| Share of (loss)/profit of joint ventures | -3,526 | 1,144 | ||
| Profit before taxes | 54,024 | 65,577 |
The average number of Group employees for the reporting period was 5,393.
The Group calculates the period income tax using the tax rate that would be applicable to the expected total annual earnings.
The major components of income tax in the interim consolidated income statement and the interim statement of comprehensive income are:
| (all amounts in Euro thousands) | For the six months ended 30/6 | |||
|---|---|---|---|---|
| 2022 | 2021 | |||
| Current income tax - expense | -7,222 | -6,786 | ||
| Provision for other taxes | -468 | -78 | ||
| Deferred tax expense | -927 | -701 | ||
| Income tax recognised in income statement | -8,617 | -7,565 | ||
| Income tax (expense)/benefit recognised in other comprehensive | ||||
| income | -5,361 | -809 | ||
| Total income tax - (expense) | -13,978 | -8,374 | ||
| The movement of the net deferred tax liabilities is analyzed as follows: (all amounts in Euro thousands) |
2022 | 2021 | ||
| Opening balance 1/1 | 104,737 | 86,877 | ||
| Hyperinflation restatement | 7,827 | - | ||
| Restated opening balance 1/1 | 112,564 | 86,877 | ||
| Tax expenses during the period recognised in the income statement | -750 | 701 | ||
| Deferred tax on treasury shares held by subsidiary (note 14) | -544 | 10,196 | ||
| Income tax expense/(benefit) recognised in other comprehensive | ||||
| income | 5,361 | 809 | ||
| Deferred tax adjustment on revaluation reserves | - | 215 | ||
| Hyperinflation adjustment | 7,753 | - | ||
| Exchange differences | 3,261 | 1,037 | ||
| Ending balance 30/6 | 127,645 | 99,835 |
Deferred income taxes are calculated in full on temporary differences under the liability method using the principal tax rates that apply to the countries in which the companies of the Group operate.
(all amounts in Euro thousands)
| Property, plant and equipment |
Right of use assets | Total property, plant and equipment |
|
|---|---|---|---|
| Balance at 1/1/2022 | 1,490,564 | 54,818 | 1,545,382 |
| Hyperinflation restatement | 38,977 | 52 | 39,029 |
| Restated balance at 1/1/2022 | 1,529,541 | 54,870 | 1,584,411 |
| Additions | 87,077 | 5,020 | 92,097 |
| Interest capitalization | 1 | - | 1 |
| Disposals (net book value) | -151 | -156 | -307 |
| Depreciation/impairment | -57,423 | -7,368 | -64,791 |
| Transfers from/to other accounts | -1,584 | - | -1,584 |
| Hyperinflation adjustment | 38,421 | -52 | 38,369 |
| Exchange differences | 26,316 | 3,431 | 29,747 |
| Ending balance 30/6/2022 | 1,622,198 | 55,745 | 1,677,943 |
| Balance at 1/1/2021 | 1,477,210 | 52,033 | 1,529,243 |
| Additions | 39,891 | 10,074 | 49,965 |
| Interest capitalization | 460 | - | 460 |
| Disposals (net book value) | -1,074 | -127 | -1,201 |
| Depreciation/impairment | -56,056 | -7,094 | -63,150 |
| Transfers from/to other accounts | 331 | -1,563 | -1,232 |
| Exchange differences | 16,270 | 1,353 | 17,623 |
| Ending balance 30/6/2021 | 1,477,032 | 54,676 | 1,531,708 |
On the Turkish subsidiary Adocim Cimento Beton Sanayi ve Ticaret A.S. assets, there are mortgages of €28.3 mil., securing bank credit facilities. On 30.6.2022, utilization under these credit facilities amounted to €3.0 mil..
Assets with a net book value of €307 thousand were disposed by the Group during the six months ended 30 June 2022 (1.1- 30.6.2021: €1,201 thousand) resulting in a net gain of €167 thousand (1.1-30.6.2021: gain €305 thousand).
In the first half of 2022, the Group's subsidiary, Titan Cement S.A., completed the sale of the remaining land plots located in Elefsina-Attika, which was classified as asset held for sale. The transaction resulted in a gain of €262 thousand, as the selling price of the plots was €500 thousand and their net book value was €238 thousand.
| (all amounts in Euro thousands) | 2022 | 2021 | |
|---|---|---|---|
| Opening balance 1/1 | 271,986 | 268,013 | |
| Hyperinflation restatement | 10,202 | - | |
| Restated opening balance 1/1 | 282,188 | 268,013 | |
| Hyperinflation adjustment | 10,390 | - | |
| Impairment | -10,390 | - | |
| Exchange differences | 15,501 | 2,674 | |
| Ending balance 30/6 | 297,689 | 270,687 | |
| North America | 210,565 | 184,048 | |
| Bulgaria | 45,440 | 45,440 | |
| Egypt | - | - | |
| Turkey | 24,532 | 24,050 | |
| Other | 17,152 | 17,149 | |
| Total | 297,689 | 270,687 |
In Turkey, demand has declined however with notable price increases well above inflation. Adocim's revenue and operating profit growth is strong, supporting a positive outlook. Though the continuous high inflationary environment requires the application of IAS 29 Financial Reporting in Hyperinflationary Economies. This increased goodwill by 20.6 mil. Overall, the increased carrying value exceeds its recoverable amount, resulting in an impairment loss of 10.4 mil.
| (all amounts in Euro thousands) | 2022 | 2021 |
|---|---|---|
| Opening balance 1/1 | 91,444 | 84,279 |
| Hyperinflation restatement | 19 | - |
| Restated opening balance 1/1 | 91,463 | 84,279 |
| Additions | 4,364 | 4,364 |
| Transfers from/to other accounts | 91 | 367 |
| Amortization/impairment | -3,676 | -2,551 |
| Hyperinflation adjustment | 10 | - |
| Exchange differences | 341 | 1,732 |
| Ending balance 30/6 | 92,593 | 88,191 |
The movement of the Group's participation in associates and joint ventures is analyzed as follows:
| (all amounts in Euro thousands) | 30/06/2022 | 31/12/2021 |
|---|---|---|
| Opening balance 1/1 | 88,753 | 85,610 |
| Share of (loss)/gain of associates and joint ventures | -2,800 | 3,291 |
| Dividends received | -923 | -475 |
| Share capital decrease | - | -336 |
| Foreign exchange differences | 12,806 | 668 |
| Other comprehensive loss | - | -5 |
| Ending balance | 97,836 | 88,753 |
Set out below is a comparison by category of carrying amounts and fair values of the Group's financial instruments.
| (all amounts in Euro thousands) | Carrying amount | Fair value | |||
|---|---|---|---|---|---|
| 30/06/2022 | 31/12/2021 | 30/06/2022 | 31/12/2021 | ||
| Financial assets | |||||
| At amortised cost | |||||
| Other non-current financial assets | 8,332 | 9,249 | 8,332 | 9,249 | |
| Trade receivables | 186,462 | 128,447 | 186,462 | 128,447 | |
| Cash and cash equivalents | 87,897 | 79,882 | 87,897 | 79,882 | |
| Other current financial assets | 67,722 | 52,860 | 67,722 | 52,860 | |
| Fair value through other comprehensive income | |||||
| Derivative financial instruments - non current | 9,713 | 2,488 | 9,713 | 2,488 | |
| Derivative financial instruments - current | 1,933 | - | 1,933 | - | |
| Fair value through profit and loss | |||||
| Derivative financial instruments - non current | 296 | - | 296 | - | |
| Receivables from interim settlement of derivatives - non current | 15,855 | 6,185 | 15,855 | 6,185 | |
| Other non-current financial assets | 1,610 | 230 | 1,610 | 230 | |
| Derivative financial instruments - current | 2,057 | 1,715 | 2,057 | 1,715 | |
| Receivables from interim settlement of derivatives - current | 11,434 | 9,079 | 11,434 | 9,079 | |
| Other current financial assets | 30 | 30 | 30 | 30 | |
| Financial liabilities | |||||
| At amortised cost | |||||
| Long term borrowings | 680,250 | 641,461 | 641,327 | 659,678 | |
| Other non-current financial liabilities | 16 | 17 | 16 | 17 | |
| Short term borrowings | 139,592 | 89,242 | 139,592 | 89,242 | |
| Other current financial liabilities | 348,973 | 281,727 | 348,973 | 281,727 | |
| Fair value through other comprehensive income | |||||
| Derivative financial instruments - current | - | 1,084 | - | 1,084 | |
| Fair value through profit and loss | |||||
| Derivative financial instruments - non current | 15,850 | 6,185 | 15,850 | 6,185 | |
| Payables from interim settlement of derivatives - non current | 10,184 | 1,070 | 10,184 | 1,070 | |
| Derivative financial instruments - current | 14,496 | 7,658 | 14,496 | 7,658 | |
| Payables from interim settlement of derivatives - current | 5,669 | - | 5,669 | - |
The management assessed that the cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities (excluding the put option) approximate their carrying amounts largely due to the short-term maturities of these instruments.
On 30.6.2022, the Group derivative balances consist of the fair values of:
a) Cross currency interest rate swap agreements (CCS), interest rate swaps (IRS) and EUR-USD forward contracts that hedge interest rate risk and/or foreign currency related to loans,
b) Forward freight agreements (FFAs) with the purpose of hedging against the volatility of freight rates,
c) Energy swap agreements for hedging exposure to price changes of coal,
d) Natural gas forward purchase contracts to fix a portion of the monthly NYMEX component of the natural gas costs in USA. The Group designated a cash flow hedge relationship between the highly probable forecast monthly purchase of natural gas and the forward contracts,
e) Forward starting interest rate swap agreements (IRS) to partially lock the interest rate cost of the forecast bond issue, which will refinance the guaranteed notes due in 2024. The Group designated a cash flow hedge relationship between the IRS agreements and the interest rate cost of the highly probable forecast issuance of a 5-year new bond. On 18.6.2022, one of the two IRS agreements was terminated with a gain of €17.9 mil. that will remain in the cash flow hedge reserve until the future cash flows from the forecast bond issuance occur.
The next table shows the gross amounts of the aforementioned derivative financial instruments in relation with their interim settlement, that is received or paid, as they are representing in the statements of financial position as at 30.6.2022 and 31.12.2021, in order to summarize the total net position of the Group.
| (all amounts in Euro thousands) | Asset /(Liability) | ||
|---|---|---|---|
| Fair value of | Interim settlement of | ||
| derivatives | derivatives | Net balance | |
| Balance at 30 June 2022 | |||
| Forwards - expired in 2022 | -9,406 | 6,229 | -3,177 |
| Energy swap - expired in 2022 | 1,073 | -1,010 | 63 |
| Natural gas forwards - expired in 2022 | 1,933 | -1,530 | 403 |
| Forward freight agreements - expired in 2022 | 984 | -1,091 | -107 |
| Interest rate swap - expired in 2023 | 9,713 | -10,000 | -287 |
| Cross currency swaps - expired in 2024 | -20,939 | 19,016 | -1,923 |
| Interest rate swaps - expired in 2026 | 295 | -178 | 117 |
| -16,347 | 11,436 | -4,911 | |
| Balance at 31 December 2021 | |||
| Forwards - expired in 2022 | -3,290 | 3,754 | 464 |
| Energy swap - expired in 2022 | -27 | - | -27 |
| Natural gas forwards - expired in 2022 | -1,084 | - | -1,084 |
| Forward freight agreements - expired in 2022 | 1,715 | 794 | 2,509 |
| Interest rate swap - expired in 2023 | 2,488 | -1,070 | 1,418 |
| Cross currency swaps - expired in 2024 | -10,526 | 10,716 | 190 |
| -10,724 | 14,194 | 3,470 |
Level 3: based on valuation techniques whereby all inputs having a significant effect on the fair value are not observable market data.
The following table provides the fair value measurement hierarchy of the Group's assets and liabilities.
| (all amounts in Euro thousands) | Fair value | Fair value | |
|---|---|---|---|
| 30/06/2022 | 31/12/2021 | hierarchy | |
| Assets | |||
| Investment property | 10,976 | 10,980 | Level 3 |
| Other financial assets at fair value through profit and loss | 1,640 | 260 | Level 3 |
| Derivative financial instruments | 13,999 | 4,203 | Level 2 |
| Receivables from interim settlement of derivatives | 27,289 | 15,264 | Level 2 |
| Liabilities | |||
| Long-term borrowings | 557,708 | 614,391 | Level 2 |
| Long-term borrowings | 83,619 | 45,287 | Level 3 |
| Short-term borrowings | 139,592 | 89,242 | Level 3 |
| Derivative financial instruments | 30,346 | 14,927 | Level 2 |
| Payables from interim settlement of derivatives | 15,853 | 1,070 | Level 2 |
There were no transfers between level 1 and 2 fair value measurements during the period and no transfers into or out of level 3 fair value measurements during the six-month period ended 30 June 2022.
| (all amounts are shown in Euro thousands unless otherwise stated) | Ordinary shares | Share premium | Total | |||
|---|---|---|---|---|---|---|
| Number of shares | €'000 | €'000 | Number of shares | €'000 | ||
| Shares issued and fully paid | ||||||
| Balance at 1 January 2021 | 82,447,868 | 1,159,348 | 5,974 | 82,447,868 | 1,165,322 | |
| Cancellation of own shares | -4,122,393 | - | - | -4,122,393 | - | |
| Balance at 30 June 2021 | 78,325,475 | 1,159,348 | 5,974 | 78,325,475 | 1,165,322 | |
| Balance at 1 January 2022 | 78,325,475 | 1,159,348 | 5,974 | 78,325,475 | 1,165,322 | |
| Share capital decrease | - | -200,000 | - | - | -200,000 | |
| Balance at 30 June 2022 | 78,325,475 | 959,348 | 5,974 | 78,325,475 | 965,322 | |
| (all amounts are shown in Euro thousands unless otherwise stated) | Number of shares | €'000 | ||||
| Treasury shares | ||||||
| Balance at 1 January 2021 | 5,512,502 | 124,120 | ||||
| Cancellation of treasury shares | -4,122,393 | -92,820 | ||||
| Treasury shares sold | -82,589 | -1,860 | ||||
| Balance at 30 June 2021 | 1,307,520 | 29,440 | ||||
| Balance at 1 January 2022 | 1,497,149 | 31,773 | ||||
| Treasury shares purchased | 943,076 | 12,196 | ||||
| Treasury shares sold | -22,607 | -432 | ||||
| Balance at 30 June 2022 | 2,417,618 | 43,537 |
In the first half of 2022, the average shares stock price of TCI is €12.91 (2021: €15.69) and the closing stock price on 30 June 2022 is €11.00 (2021: €16.40).
On 9.5.2022, the Extraordinary Shareholder's Meeting of TCI approved the actual capital reduction by an amount of €200 mil. by way of reimbursement in cash to the shareholders pro rata to the number of shares they hold in the Company. This capital reduction was carried out without cancellation of shares with the purpose of bringing the capital of the Company into line with the present and future needs of the Company. The Meeting granted the Board of Directors the power to decide, at its own discretion, the date of repayment to the shareholders of the aforementioned amount in one or several times.
On 22.6.2021, TCI cancelled 4,122,393 treasury shares, which represented 5% of its voting rights. Following this transaction, the number of shares with voting rights amounts to 78,325,475. Τhe aforementioned cancellation of own shares did not have any change in the value of Company's Share Capital.
| (all amounts in Euro thousands) | Legal reserve |
Non Distribu table reserve |
Distribu table reserve |
Re organization reserve |
Contingency reserves |
Tax exempt reserves under special laws |
Re valuation reserve |
Actuarial differences reserve |
Hedging reserve from cash flow hedges |
Currency translation differences on derivative hedging position |
Hyper inflation reserve |
Foreign currency translation reserve |
Total other reserves |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance at 31 December 2020 | 101,263 | 88,870 | 180,337 | -1,188,374 | 274,202 | 25,595 | 67,145 | -3,285 | -36 | 41,115 | - | -464,898 | -878,066 |
| Change in accounting policy | - | - | - | - | - | - | - | 2,574 | - | - | - | - | 2,574 |
| Restated Balance at 31 December 2020 | 101,263 | 88,870 | 180,337 | -1,188,374 | 274,202 | 25,595 | 67,145 | -711 | -36 | 41,115 | - | -464,898 | -875,492 |
| Other comprehensive income | - | - | - | - | - | - | 71 | -116 | 380 | - | - | 14,388 | 14,723 |
| Deferred tax on treasury shares held by subsidiary | - | - | - | - | - | - | -10,196 | - | - | - | - | - | -10,196 |
| Cancellation of 4,122,393 treasury shares | - | -65,318 | - | - | - | - | - | - | - | - | - | - | -65,318 |
| Distribution of reserves | - | - | -30,780 | - | - | - | - | - | - | - | - | - | -30,780 |
| Acquisition of non-controlling interest | 1 | - | - | - | - | - | 7 | - | - | - | - | 1 | 9 |
| Deferred tax adjustment on revaluation reserves | - | - | - | - | - | - | -213 | - | - | - | - | - | -213 |
| Transfer from/to retained earnings | 6,881 | - | -422 | - | - | 1,526 | -3,178 | - | - | - | - | - | 4,807 |
| Transfer from share options | - | - | - | - | 1,996 | - | - | - | - | - | - | - | 1,996 |
| Transfer among reserves | - | -1,578 | 1,578 | - | - | 2,556 | -2,556 | - | - | - | - | - | - |
| Restated balance at 30 June 2021 | 108,145 | 21,974 | 150,713 | -1,188,374 | 276,198 | 29,677 | 51,080 | -827 | 344 | 41,115 | - | -450,509 | -960,464 |
| Balance at 1 January 2022 | 108,178 | 23,603 | 149,084 | -1,188,374 | 68,098 | 27,238 | 49,115 | 152 | 1,609 | 41,115 | - | -446,516 | -1,166,698 |
| Hyperinflation restatement | - | - | - | - | - | - | - | - | - | - | 35,699 | - | 35,699 |
| Restated balance at 1 January 2022 | 108,178 | 23,603 | 149,084 | -1,188,374 | 68,098 | 27,238 | 49,115 | 152 | 1,609 | 41,115 | 35,699 | -446,516 | -1,130,999 |
| Other comprehensive income | - | - | - | - | - | - | - | - | 27,203 | - | 24,379 | 21,284 | 72,866 |
| Deferred tax on treasury shares held by subsidiary | - | - | - | - | - | - | 544 | - | - | - | - | - | 544 |
| Distribution of reserves | - | - | -38,108 | - | - | - | - | - | - | - | - | - | -38,108 |
| Capital reduction/transfer to distributable reserves | - | - | 200,000 | - | - | - | - | - | - | - | - | - | 200,000 |
| Transfer from/to retained earnings | 21,277 | - | -757 | - | -14,390 | 5,419 | -1,312 | - | - | - | - | - | 10,237 |
| Transfer from share options | - | - | - | - | 1,663 | - | - | - | - | - | - | - | 1,663 |
| Transfer among reserves | - | 11,832 | -11,832 | - | - | - | - | - | - | - | - | - | - |
| Balance at 30 June 2022 | 129,455 | 35,435 | 298,387 | -1,188,374 | 55,371 | 32,657 | 48,347 | 152 | 28,812 | 41,115 | 60,078 | -425,232 | -883,797 |
In the statement of other comprehensive income, the exchange differences resulting from the translation of foreign operations in the first six months of 2022 amounted to a net gain of €57.9 mil. (30.6.2021: gain of €10 mil.), of which gain €51.9 mil. (30.6.2021: gain €12.4 mil.) are attributable to the shareholders of the Parent Company and gain €6.0 mil. (30.6.2021: loss €2.4 mil.) to the non-controlling interests. The increase in net gain of €47.9 mil. between the two periods is mainly due to the positive impact of hyperinflation in Group's Turkish subsidiaries amounted to €31.1 mil., as well as the strengthening of both US dollar and Brazilian real against Euro.
Following the authorization granted to the Board of Directors by the Extraordinary Meeting of the company's Shareholders on the 13th of May 2019, the Board of Directors of Titan Cement International SA decided on the 16th of March 2022 the return of capital of €0.50 (50 cents) per share to all the Shareholders of the Company on record on the 28th of April 2022, which was paid on the 5th of July 2022.
Following the authorization granted to the Board of Directors by the Extraordinary Meeting of the company's Shareholders on the 13th of May 2019, the Board of Directors of Titan Cement International SA decided on the 22nd of March 2021 the return of capital of €0.40 (40 cents) per share to all the Shareholders of the Company on record on the 29th of April 2021.
| Contingent liabilities | ||
|---|---|---|
| (all amounts in Euro thousands) | 30/06/2022 | 31/12/2021 |
| Bank guarantee letters | 15,708 | 17,142 |
| 15,708 | 17,142 | |
| Contingent assets | ||
| (all amounts in Euro thousands) | 30/06/2022 | 31/12/2021 |
| Bank guarantee letters for securing trade receivables | 24,113 | 22,350 |
| Other collaterals against trade receivables | 6,909 | 7,099 |
| 31,022 | 29,449 | |
| Collaterals against other receivables | 3,781 | 4,442 |
| 34,803 | 33,891 | |
Capital commitments contracted for at the balance sheet date but not recognized in the financial statements are as follows:
| (all amounts in Euro thousands) | 30/06/2022 | 31/12/2021 |
|---|---|---|
| Property, plant and equipment | 2,505 | 713 |
Energy supply contracts (Gas, electricity, etc.)
| (all amounts in Euro thousands) | 30/06/2022 | 31/12/2021 |
|---|---|---|
| 29,783 | 1,026 |
The increase in purchase commitments is mainly due to electricity and fossil fuels commitments in South Eastern Europe region.
In addition to the aforementioned purchase commitments, the Group's US subsidiaries entered a contract to purchase raw materials and manufacturing supplies as part of their on-going operations in Florida. This includes a contract to buy construction aggregates through a multi-year agreement at prevailing market prices. Moreover, Titan America LLC (TALLC) entered into a take-or-pay natural gas agreement with the local utility in 2019 that requires TALLC to pay the utility €11.2 mil. (\$11.6 mil.) over a maximum period of 6 years. On 30.6.2022, TALLC had paid €3.7 mil. (\$3.9 mil.) under the agreement.
Simultaneously, TALLC entered into capacity supply agreements (one in 2020 and another in 2021) with a natural gas marketer for a total of 2,026 MMBtu's over the contract period. On 30.6.2022, there is committed volume of 984 MMBtu's remaining through October 2022 under the contract.
| (all amounts in Euro thousands) | 30/06/2022 | 31/12/2021 |
|---|---|---|
| Utility deposits | 5,411 | 5,197 |
| Excess benefit plan assets | 2,648 | 3,307 |
| Other non-current assets | 8,834 | 10,052 |
| 16,893 | 18,556 |
The increase in inventories includes the positive impact of foreign exchange differences and hyperinflation in Group's Turkish subsidiaries amounted to €8.1 mil. and €1.9 mil. respectively. The organic change of €49.5 mil. is mainly due to the increased deliveries of fossil and alternative fuels, raw materials and clinker.
Receivables and prepayments increased by €59.3 mil. due to trade receivables. The increase reflects mainly the increase in revenue due to price increases combined with resilient demand and the seasonality of the business.
The increase in Group "Trade and Other Payables" by €80.8 mil. includes foreign exchange differences of €10.7 mil., trade suppliers increase of €27.6 mil. and the payable of the capital return to the Company's shareholders of €38.1 mil..
There are no subsequent events to 30 June 2022, which would materially influence the Group's financial position.
Since 31.12.2021, there is no further significant development concerning Covid-19 implications.
| Spot rates | 30/06/2022 | 31/12/2021 | 30/6/2022 vs 31/12/2021 |
|---|---|---|---|
| €1 = USD | 1.04 | 1.13 | -8.3% |
| €1 = EGP | 19.71 | 17.87 | 10.3% |
| €1 = TRY | 17.32 | 15.23 | 13.7% |
| €1 = BRL | 5.44 | 6.32 | -13.9% |
| €1 = RSD | 117.41 | 117.58 | -0.2% |
| 1USD=EGP | 18.97 | 15.78 | 20.2% |
| Average rates | Ave 6M 2022 | Ave 6M 2021 | Ave 6M 2022 vs 6M 2021 |
| €1 = USD | 1.09 | 1.21 | -9.3% |
| €1 = EGP | 18.88 | 18.91 | -0.1% |
| €1 = TRY | 16.25 | 9.52 | 70.7% |
| €1 = BRL | 5.56 | 6.49 | -14.4% |
| €1 = RSD | 117.59 | 117.58 | 0.0% |
| 1USD=EGP | 17.27 | 15.69 | 10.1% |
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.