Vicat's sales increase in the 1st half, but profits are weighed down by energy costs

The group posted a turnover of 1,755 billion euros, up 12,5% ​​compared to the first half of 2021. This "strong increase" is "the result of a significant increase in selling prices, which has largely compensated for the drop in volumes delivered", details the company in a press release published on Wednesday July 27.

Each of the main activities of the group founded in 1953 by the son of one of the inventors of cement, Louis Vicat, contributed to this "favorable" development, with a 17,3% increase in sales for Cement and 14,8 % for Concrete & Aggregates.

However, Vicat shows a 16,8% drop in its net profit, which amounts to 78 million euros in the first half of 2022, against 94 million in 2021.

In question: "the very high inflation of production costs, in particular energy (...) which accelerated significantly in 2022", with the war in Ukraine and the economic sanctions taken by the West against Moscow. "The rise in energy costs amounts to +64,7%", details the family group, which employs more than 9.500 people in 12 countries.

"This first half was marked by a very unfavorable basis for comparison given the levels of activity and profitability achieved last year over the same period", attempts to reassure CEO Guy Sidos, quoted in the press release, stressing that "operating profitability remains much higher than the level before the health crisis".

Faced with the "high inflation of energy costs", the group will adapt "by diversifying its sources of supply" and "by working on the energy efficiency of its production tool", pleaded its CEO.

Vicat thus specifies that the construction, which began in 2019, of a new, less energy-intensive kiln in its American factory in Ragland, Alabama, has just been completed. "The technology used, particularly efficient from an energy point of view, will reduce production costs by around 30% per tonne produced", boasts Vicat, promising a "ramp up" in the second half.

So much so that the group confirms its forecasts for 2022, still counting on a "significant increase in its turnover supported by the progress of its activity and the sharp increase in selling prices" and a growth in its operating profit ( Ebidta), "but less noticeably than in 2021".