Readymix pre-tax losses hit €6.6m

BUILDING materials company Readymix has reported a pre-tax loss of €6.6 million for the first half of the year and has said that it may need fresh capital for long-term development projects.

In a pre-close interim trading update, last month, the cement products company — which is predominantly owned by Mexican group Cemex — said it was expecting such a result for the first six months of the year and was anticipating making another full-year loss for 2010.

As well as confirming the pre-tax loss, yesterday’s half year results showed a €6.1m operating loss, before exceptional items — which happened to increase that loss by €300,000. The overall losses for the period were mainly driven by a slowdown in demand for the company’s products and services. Revenue from aggregate sales were down by over 30%, on a year-on-year basis, while revenue from concrete products fell by 24% on the corresponding period last year.

“The exceptionally challenging trading conditions experienced since the latter half of 2007 have deteriorated further during 2010,” the company said in its interim statement.

Management added that due to continuing weakness in the housing and commercial property sectors and the uncertain timing of new infrastructure projects, it expects “the very demanding trading conditions to continue for the remainder of 2010 and into 2011”.

The company is not recommending a resumption of dividend payments to shareholders; preferring instead to conserve its cash resources.

“The priorities for management continue to be further reductions in cost and efficiency savings,” the company added — but claimed that there are no immediate plans for further job cuts.

In terms of future challenges facing the company, it said that increased competition for reduced market volumes “may lead to further pressure on earnings” and that changes in Government regulations may adversely affect the group.