Denmark: Rockwool International has released its first half financial results for 2012, which show a generally improving picture. The group generated sales in the first half of 2012 of Euro919.9m, corresponding to an increase of 9% compared to same period of 2011. External sales in the group's insulation segment increased by 9% to Euro758.1m. Part of Rockwool's improved financial picture is due to an increase in the number of plants it operates. In the first six months of 2011 it opened a production facility in Russia and increased activity in India, North America and elsewhere.
Earnings before interest, tax, depreciation and amortisation (EBITDA) for the group reached US$126.7m and earnings before interest and tax (EBIT) came to Euro57.7m, an increase of Euro18.2m (EBIT) compared to the same period of 2011. In the first half of 2012, the insulation segment EBIT came to Euro40.0m, an increase of 87% year-on-year.
In the western European insulation market, Rockwool reported that the good trading conditions observed in France and Germany since 2011 had continued for the group during the second quarter of 2012, offsetting the negative trends seen in countries like Spain, the UK and the Netherlands, in which it is experiencing increasingly difficult market conditions. In eastern Europe, Poland has continued its strong recovery, whereas Russia is seen by Rockwool to be levelling out, albeit with a small increase in sales compared to the first half of 2011.
Sales in North America continued to develop well. In Asia, and particularly in China, demand for non-combustible insulation material is increasing and is likely to be even stronger when new Chinese regulations regarding fire safety in buildings come into force.
Sales prices have continued to increase during the second quarter of 2012, however at a lower level than during the first quarter and with large differences between markets. The inflation on most raw materials was still high for this period although Rockwool started to benefit from lower foundry coke prices deriving from more reasonable coking coal prices.
Looking ahead to the remainder of 2012, Rockwool expects the general slowdown of the western European economy and the Euro crisis to have further negative effects on the new-built insulation markets, although refurbishment is expected to be resilient. In eastern Europe including Russia, Rockwool expects insulation markets to show robust double-digit growth. The very positive sales development in North America is expected to continue, well supported by better market conditions. In Asia, its sales development will be limited by the as-yet unsolved logistical challenges of importing products from Europe. Overall, the group expects its net sales at current exchange rates to increase by at least 5% for the full year 2012.
Despite the slowdown of the world economy Rockwool says that it expects a continuation of inflationary pressures in 2012 and it will maintain its focus on increasing sales prices and cost-control. It forecasts a net profit for the whole of 2012 in the region of Euro87.3-93.8m.
