Vassiliko Cement profits decline in first half

Vassilico Cement Works Public Co Ltd (VCW) reported a decline in profitability during the first half of 2008 compared to a year ago with net profit declining 14.7% to EUR7.37 mln from EUR 8.64 mln a year ago in the first half.
This is the first time VCW includes the operating results of the acquired assets of Cyprus Cement Company (CCC) in its financial statements. To this respect, 1H08 results are not comparable with VCW’s corresponding 1H07 as prior year results include only VCW’s results.
Total sales rose strongly by 45.6% YoY to EUR 67.3 mln after the consolidation of CCC results with those of VCW and the continuous increase in demand for cement during the first six months of 2008, whilst no export sales were recorded. Total operating expenses rose by 19.2% YoY to EUR 4.9mln, whilst in terms of revenue they improved to 7.3% (vs. 8.9% in 1H07)
Operating profit fell by 28% to EUR6.7mln as a result of the increasing administrative and distribution expenses. Profitability was also negatively impacted by the lower net financial income, which stood at EUR257k (6M08: EUR401k). In addition, Management highlighted the positive contribution in profitability, of the cement activities acquired by the Cyprus Cement Company (CCC).
With regards to the acquisition of operations of CCC, Management expects higher energy costs to be maintained at the same level, since the Company has committed to the Competition Commission not to pass through any additional price rises to the consumers.