News and Press Releases

2004 FULL YEAR RESULTS UNDER GREEK GAAP & IFRS

According to the Greek GAAP, Titan Group’s turnover totalled € 1,104 m., achieving a 6.6% growth versus 2003. EBITDA operation grew by 9.3%, reaching € 323 m. Net profit for the Group increased by 35%, reaching € 169 m. after taxes. 

Operational results were affected negatively by the revaluation of the Euro in 2004, especially vs the US dollar. At constant exchange rates, our turnover grew by 11% and our operating EBITDA by 12.6%. 

The EBITDA growth is exclusively due to the growth and performance improvement of our international operations, that over-compensated for the anticipated profitability drop in Greece, after completing the pre-Athens Olympics’ projects. 

The significant improvement in Net Profit after taxes is due to a positive balance in our extraordinary results, which is mainly the result of our foreign exchange policy. 

With a view to better inform the investment community, we are also releasing today, for the first time, together with our Greek GAAP results, our International Financial Reporting Standards (IFRS) results for 2003 and 2004. As you can see on the summary table below, IFRS results are slightly -but not significantly- better. 

The main changes relate to the consolidation of our Egyptian operations (proportionate consolidation as opposed to equity consolidation used under Greek GAAP), the calculation of depreciation (useful life of assets versus tax-accelerated depreciation in Greece) and taxes (recognition of deferred tax liabilities), as well as the recording of foreign exchange differences.
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More specifically, in the regions where the Group operates:

• In Greece, as expected, domestic demand for cement in the fourth quarter continued to drop after the pre-Olympic Games peak. The effect of cost increases in fuel was partially offset by the benefit of more efficient performance due to plant modernization.
• In the U.S.A., market conditions continued to improve. Price increases were underpinned by increased demand for our products. Our newly modernized Pennsuco plant is now fully operational and has reached rated capacity, already providing Florida with much needed incremental cement volumes. Our new terminal in Tampa also opened in December, securing further flexibility for the expansion of our operations.
• The Group’s results were also positively affected by its recent expansion in S.E. Europe. A double-digit growth in demand was recorded in Bulgaria, Serbia posted a small recovery, while in the Former Yugoslav Republic of Macedonia we experienced a marginal slowdown.
• In Egypt, the price recovery was maintained due to the re-orientation of excess production capacity towards exports. However, there was a decrease in domestic demand, which was offset by a corresponding increase in exports. The Egyptian pound remained remarkably stable versus the US dollar, resulting in only a slight devaluation versus the Euro against the significant losses in 2003.

For 2005, we again expect improved contribution to operating profitability from our international activities, mainly in the USA. In Greece, a further decrease in demand is foreseen. Titan will continue to invest in the modernization of its plants, albeit at a lower rate compared to the last three years. 

Sales of the parent Titan Cement Company S.A. were flat at € 431 m. for 2004. Operating EBITDA at € 148 m. was down by 5%, reflecting a shift of volume from the domestic market to exports in the latter part of the year, as well as cost increases in solid fuels. Increased depreciation charges totalling € 41m (versus € 27m in 2003), together with an increase in the provision for exiting staff indemnities, led to a 15% reduction in net profit after tax, to € 95 m. Excluding those two factors, net profit is in-line with 2003. The provision for taxes of the parent is not yet finalised as the Company is expecting clarification of recent tax law modifications by the government.

The Board of Directors of Titan Cement Co. S.A. will recommend to the Annual General Meeting of Shareholders, which has been scheduled for May 12, 2005, a cash dividend of € 0.52 per share, versus € 0.475 for the year 2003.