TITAN Cement Group generated record revenues of €1,714.6 million, up 6.7% from 2020, reflecting higher demand and a supportive pricing environment. Due to the unexpected spike of input costs in the second semester and despite pricing initiatives that partly alleviated the burden, Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) declined by 4.6% to €272.4 million. Net Profit after Taxes and minorities (NPAT) climbed to €89.6 million (vs €1.1 million in 2020 and €50.9 million in 2019). This significant increase was the result of lower finance costs, more favourable FX movements and a lower effective tax rate. It should be noted that in 2020 there were €63.9 million one-off charges related to Egypt. Thanks to a successful refinancing strategy the Group lowered significantly its finance costs for a third consecutive year to €33.6 million (€19.0 million lower than 2020 and €30.0 million lower than 2019).
Delivery was strong across all Group markets: US operations marked a new milestone with sales revenue at record levels thanks to growing demand, underpinned by healthy macroeconomic conditions. In Greece, the market continued its positive performance, lending further support to the belief that demand is solidly in the upward path of the business cycle. In Southeastern Europe performance was robust. Performance in the Eastern Mediterranean turned positive, thanks to the mix of demand pick-up and better pricing dynamics in Egypt, while in Turkey, despite the volatile economic situation, the Group recorded revenue growth as well. Finally, our Brazilian operations continued to grow significantly.
Trends in domestic sales volumes were positive across all regions, testifying to strong market fundamentals. At Group level, volumes increased across all product lines: cement, ready-mix concrete, aggregates, building blocks and fly ash. Group cement sales increased by 7% compared to 2020, reaching 18.3 million tons, with US being the main contributor of this increase. Ready-mix concrete sales increased by 2% in 2021, reaching 5.5 million m3 on the back of stronger sales in US and Greece. Aggregates' sales increased by 1% reaching 20.2 million tons, thanks to the strength of the Greek market.
USA
2021 was a year of record sales for Titan America. Consumption in our markets grew considerably above the US average, as our customers saw their activities expanding and their backlogs increasing. Sales of cement, readymix, concrete blocks and fly ash increased, while aggregates sales were maintained at high levels. Activity in Florida benefits as the state develops into a vibrant business and financial center, while augmented internal migration trends are generating an increase in housing demand and attendant non-residential construction. Cement consumption also grew in the Mid-Atlantic with business performance being driven by the increased volumes generated by strong residential demand and cement-intensive public works projects. The New York Metropolitan area and New Jersey, also saw cement consumption increase, allowing our import terminal to expand its sales, though higher import freight costs negatively affected its profitability. Considering the strength of the US market and its positive outlook, the Group initiated an ambitious investment program, aimed at expanding the effective supply capacity of its operations and at achieving efficiencies in logistics and production, in order to capture growth. Revenue for TITAN’s US operations increased compared to 2020 reaching $1.2 billion, an increase of 8.6% year on year. In euro terms, revenue increased by 4.7% to €983.6 million. EBITDA reached €155.2 million, a decline of 12.0% compared to 2020 (-8.4% in US $ terms) as operational profitability was constrained by global cost headwinds and supply chain disruptions which reflected negatively on import freight, energy, logistics and labor costs.
Greece & W. Europe
In Greece, cement demand continued to grow at a strong rate, similar to the one recorded in 2020, driven by the increased levels of activity in public and municipal infrastructure projects, as well as growth in residential construction and broader real estate and logistics projects. Tourism activity also picked up, following the slowdown caused by the pandemic. Cement exports remained strong, with the US representing Greece’s biggest export destination. Profitability was nevertheless impacted by the unexpected steep rise in energy and transportation costs in the second half of the year. The Group was able to partly mitigate the effect through product price increases implemented in Q4, with the notable increase in alternative fuel utilization and by further operational efficiencies that resulted from an increased number of digitalization projects across our plants. Total revenue for Greece and Western Europe in 2021 increased by 9.4% to €267.6 million while EBITDA increased by €7.4 million to €23.6 million.
Southeastern Europe
Performance in Southeastern Europe was again solid, driven by higher demand and improved pricing. Overall, it was the residential and private commercial works which formed the key sources of demand. The Group continued investing in expanding plant operational efficiency, with two of them reaching more than 10-year production records. Despite the strength of the market and successful price increases earlier in the year, the increase in electricity and fuel costs, which surged especially in the second half of the year, inevitably softened profitability. Revenue for the region overall increased by 7.3% reaching €290.6 million while EBITDA declined by 14.8% versus 2020 reaching €81.9 million, however still above the profitability of 2019.
Eastern Mediterranean
The Eastern Mediterranean region saw a return to positive performance in 2021 amidst continued demand growth, despite the local macroeconomic uncertainties. In Egypt, cement demand started to recover after four years, as a result of stronger construction activity coming from national infrastructure projects and construction of affordable housing. Cement consumption reached 48.5 million tons posting a 6% increase. Moreover, the market regulation agreement set by the Egyptian government on all cement producers in July 2021, has narrowed the gap between supply and demand, leading selling prices to much healthier levels. Group volumes grew and our plants also focused on operational excellence and digitization projects, while also exploring new growth opportunities mainly in export markets. In Turkey, despite the volatile economic environment characterized by a 65% depreciation of the local currency, soaring inflation of 36% and a contraction in household real income, the economy grew by 9% in 2021, supported by the continuous credit expansion following a series of rate cuts by the Central bank. Domestic cement demand strengthened by 7%, reaching nearly 60 million tons, still approximately 15% below the peak levels of 2017. Group volumes reflected this upward trend, as demand continued to grow for private housing, public works in infrastructure projects, as well as exports. Following a few years of weak performance and despite the macroeconomic uncertainties, the Eastern Mediterranean region recorded total revenue of €172.8 million, an increase of 13.9% from 2020. EBITDA was €11.8 million versus a €3.3 million loss in 2020, reflecting a significant improvement in the EBITDA margin, despite the sharp depreciation of the Turkish Lira.
Brazil (Joint Venture)
In Brazil the improved economic environment led to stronger construction activity and cement demand grew for a third consecutive year. In the second half of 2021 however, the market witnessed a slight slowdown as inflationary pressures started to mount and interest rates increased. Our joint venture Apodi increased its sales volumes at a higher rate than the national average by continuing to penetrate the bulk cement segment, with a focus on the pre-cast industry, the growing regional wind park sector and projects in the renovation and expansion of infrastructure such as the Fortaleza airport. As a result, Apodi posted a significant increase in revenue to €83.8 million vs €70.7 million in 2020, while net profit attributable to TITAN Group reached €2.7 million compared to €2.6 million in 2020, posting a 4.6% increase.
