Titan S.A. (TITC) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. I'm Konstantinos, your Chorus Call operator. Welcome, and thank you for joining the Titan Cement Group conference call to present and discuss the first quarter 2020 financial results. [Operator Instructions] And the conference is being recorded. Please note this call and presentation is intended for analysts and investors only. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Michael Colakides, Group CFO; and Mr. Dimitri Papalexopoulos, Chairman of Group Executive Committee. Mr. Colakides, you may now proceed.

Thank you. Good evening, ladies and gentlemen. Welcome to our conference call for the presentation of TITAN's Q1 2020 results. The focus today is not only on what happened in the first quarter of the year but also the current status and outlook 2 months after the outbreak of COVID-19. We'll start with how TITAN Group responded to the pandemic, followed by the current state of some operations and markets. Then we will cover the main points of our Q1 performance. And after a brief on the broad outlook of the group, we will open the lines for your questions. Dimitri will start with our response to COVID-19.

Thank you, Michael. And good morning -- good afternoon, ladies and gentlemen. Let me start by saying that it seems that we successfully navigated the first phase of the crisis. Since the emergence of the pandemic, which appeared in all countries of operation in early to mid-March, our first focus has been to take measures to protect our employees and their families, along, of course, with our business partners, customers and our local communities. We took additional protective measures for those working on-site in the front line -- on the front lines to ensure that they could operate under the safest possible conditions. Over 35% of total employees switched effectively to remote working at group level. Teleworking reached nearly 100% of -- for office employees. We continued our collaborative efforts with local authorities, public health institutions and civil society organizations focused on health, safety and hygiene. We tangibly supported health providers in several locations. At the same time, we were able to make sure that disruptions to our operations were minimal and that we continue to provide the best possible service to our customers. In the context of considerable uncertainty, we took mitigating actions to anticipate developments. We strengthened our liquidity position to over EUR 400 million in a mixture of cash and undrawn but committed loan facilities. We scrutinized our capital expenditure plan and suspended or postponed EUR 50 million of nonessential expenditure, roughly half of our annual total. And we identified and are implementing over EUR 33 million so far of cost-reduction opportunities. Moving on to Page 4. Let me share briefly where we stand today. The early impact of the pandemic on our company and on our sector was less severe than was initially feared. Within the TITAN family, we have had no fatalities or serious or mass infection incidents so far. Construction has been deemed to be a safe and essential industry in most countries. All our cement plants are in operation, adjusting, of course, their production levels to satisfy the current levels of demand. Indicatively, we estimate that cement markets have declined over the past 6 weeks over a whole range of figures. In the southeast of the U.S., Florida, mid-Atlantic as well as Turkey, in the order of magnitude of minus 10%. In more severely affected markets like the Balkan countries in Southeastern Europe or the area around New York and Brazil, we're talking about declines in the order of magnitude of 30% to 40%. Greece is somewhere in between, around 25%, while in Egypt, there has been growth at this point in time despite the adversities. As lockdown measures are gradually lifted in some countries, we observed increases in market consumption, although I hasten to clarify that it's, of course, too early to assess patterns and a brief upturn after the lift of a lockdown does not in and of itself consist of a trend. Let me with that now give the floor back to Michael to take us through the financial results for the first quarter before coming back to the outlook.

Thank you, Dimitri. Let's move to Slide 6, covering the highlights of the first quarter. Sales started 2020 on a strong footing. Based on robust U.S. demand and resilience of markets in the Eastern Mediterranean, group consolidated revenue improved by 6.1% to EUR 385 million, while EBITDA declined from EUR 44 million to EUR 41 million, but that was mainly due to the upfronting of about EUR 10 million of costs associated with the earlier timing of the plant maintenance in Florida. The equivalent maintenance last year was done in Q2. It was done in April. Group Q1 2020 net result was a loss of EUR 16 million hit by one-off EUR 9 million mark-to-market loss on fixed dollar interest rate hedge. Revenue in the U.S. increased to EUR 238 million, supported by resilient construction spending. EBITDA came at EUR 28 million, lower by EUR 13.6 million compared to last year following the plant stoppage in Florida. Total revenue for Greece and Western Europe grew to EUR 57 million. On the operating level, EBITDA turned positive at EUR 1 million, supported by the lower fuel costs. Construction in Southeast Europe had a strong start to the year, which was offset by lower demand in March due both to the pandemic outbreak and bad weather conditions. Revenue for the region was stable at EUR 48 million. EBITDA rose to EUR 12 million, increasing by EUR 2.9 million compared to the first quarter of 2019. Demand in Egypt and Turkey recorded growth in Q1. Total revenue in the region of East Med posted a Q1 21.3% increase, reaching EUR 42 million. EBITDA improved to just EUR 400,000 of loss, up from a loss of EUR 5.2 million in the first quarter of 2019. The seasonal cash outflow from operations in the first quarter was EUR 17 million, improved by EUR 10 million compared to Q1 of 2019. Group net debt at the end of March reached EUR 878 million, higher by EUR 42 million against the end of 2019 last December and was inflated by the strengthening of the U.S. dollar. Now preliminary April year-to-date results show that despite the reduced April sales, year-to-date consolidated revenue for the fourth month period was EUR 508 million, the same -- exactly the same as in 2019. EBITDA, with April this year not incurring high maintenance cost, year-to-date, reached EUR 67.2 million, up by EUR 5.7 million or 9.3%. This increase comes from savings, from lower cost of solid fuels across all countries and from the improved result of our Egyptian operations. Turning to Slide 7, the graphic presentation of the Q1 group results. Group consolidated revenue was up by 6.1% despite the slowdown from the COVID-19 since mid-March. EBITDA declined by EUR 3.7 million, reaching EUR 40.6 million mainly due to the earlier plant maintenance costs. And the Q1 net result, which is a typical loss-making first quarter, was a loss of EUR 15.8 million, a decline caused by the one-off EUR 9 million mark-to-market loss on the U.S. dollar fixed interest rate hedge. Now looking at our P&L on Slide 8. I should point out that there are about EUR 10 million of maintenance cost from Florida included as a charge in the cost of goods sold. Also, as mentioned earlier, the one-off EUR 9 million mark-to-market loss on the fixed dollar interest rate hedge is included under finance costs, which appear increased. Turning to our balance sheet on Slide 9. The strengthening of the group's liquidity position to above EUR 400 million, which we have referred to, is partly reflected in the increase of cash to EUR 139 million. In parallel, debt has also grown by EUR 39 million. Receivable increase reflects higher sales in nearly all markets during the quarter. The activation of the share buyback program had no impact at the end of March. But by May 11, the group acquired 590,000 shares for a total value of EUR 6,569,000. Looking at our volumes. As I said, sales volume were positive in a strong start of the quarter across all product lines. Group cement sales increased by 4%, supported by higher demand across most markets; aggregates sales increased by 3%; and ready-mix sales increased by 2%. On Slide 11, the group cash -- operating cash flow in the quarter was impacted by the seasonal working capital needs of EUR 41 million, which is naturally the time when plants undergo their annual maintenance and build inventories to support the business during the closure period. CapEx in the first quarter reached EUR 20.8 million with the majority of funds invested to improve competitiveness of the U.S. activities. And net debt increased by EUR 42 million against December and was inflated by EUR 17 million due to the revaluation of the U.S. dollar against the euro. On Slide 12, group net debt at the end of March at EUR 878 million was lower than the first quarter of 2019. So the year-over-year comparison, it's somewhat lower. In addition to some EUR 140 million of cash reserves, the group has ample liquidity with EUR 426 million of unutilized bank facilities, most of them committed, as you can see in the bottom left chart. Finally, the group has a staggered debt maturity profile, the next significant maturity coming in June 2021 with a maturity of our EUR 300 million bond issued back in 2016. Now let's take a look at our regional performance on Slide 14, starting with America. Activity in the U.S.A. saw a strong start to the year, in line with the industry's growth expectations regarding construction dynamics. Revenue in dollar terms recorded a 3.1% increase and reached EUR 237.8 million. The EUR 10 million upfront cost for the maintenance stoppage in Florida weighed on profitability, and EBITDA decreased by EUR 13.6 million to EUR 27.7 million. There was growth ahead of last year across most product lines with the exception of fly ash, which declined further and cost another EUR 1.5 million in declined profitability. Operations continued uninterruptedly with a moderate slowdown of demand in Florida and the mid-Atlantic since mid-March. Lockdown measures were more felt by our import terminal that supplies the new metro area, markets where sales have since dropped by some 35% to 40%. Now in Greece, the market showed good growth signs from the beginning of the year. Total revenue increased by 2.4%, reaching EUR 57.5 million. EBITDA turned positive to EUR 1.4 million compared to a EUR 0.8 million loss in the first quarter of 2019. In a seasonally low quarter, demand in the local market was supported by peripheral construction projects and private investments. Export sales were higher than last year and also benefited from the strengthening of the U.S. dollar. Cost savings, mainly due to lower prices of pet coke, supported profitability. In accordance with our goals to sustain growth, use of alternative fuels increased, benefiting the environment and driving the reduction of our CO2 emissions. Construction in the Southeastern Europe had a strong start to the year as well, which was offset by lower demand in March due both to early measures everywhere to control the pandemic outbreak and due to unfavorable weather conditions. Revenue posted a marginal 1% decrease at EUR 47.9 million, while EBITDA reached EUR 12 million, increasing by EUR 2.8 million compared to the first quarter of 2019, a result coming from a positive pricing environment and the declining cost of solid fuels. Higher use of alternative fuels of our Bulgarian subsidiary, Zlatna Panega, reached 40% substitution rate, in line with our commitment to reduce our carbon footprint. Turning to Slide 17 for East Med. Egypt continues to surprise us. Demand in Egypt recorded some good growth in the first quarter, posting about 5% volume increase despite measures taken in March to contain the spread of the pandemic. In Turkey, on the other hand, we experienced growth in domestic sales as well as in exports, while in the country, there were some notable regional differences, depending on the lockdown measures taken. Total revenue in the region of East Med posted a 21.3% increase, reaching EUR 41.5 million. East Med also benefited from declining solid fuel costs but with stagnant market prices at low levels. Operating performance improved significantly and came close to breakeven at the EBITDA level and recorded a EUR 400,000 loss compared to a EUR 5.2 million loss in the same period of 2019. Last, a couple of comments on Brazil. The market in the northeast of Brazil posted small growth in the first quarter of the year. This allowed our joint venture, Apodi, to expand volume sales, increase revenue in local currency and improve profitability. Now this completes the review of performance in the quarter. I would like now to hand over to Dimitri for some comments on the outlook for the year ahead.

Thank you, Michael. At this point, it is hardly original to say that we are in uncharted territory with low visibility and many levels of uncertainty over the next few months. We expect demand for our products to be hit, although the depth and duration of the decline in demand cannot be assessed at this time. Typically, cement demand reacts slowly to macro changes, both going down and going up. In particular, demand for housing will likely be held back by declining confidence, macro level and rising unemployment. Similarly, nonresidential projects, commercial projects, hotels, malls, offices, et cetera, risk being postponed or canceled. On the positive side, the resilience of the sector will be supported by a number of factors. First, construction is viewed as a safe and essential industry. It is mostly outdoors, allows for fairly easy social distancing, provides jobs and an important service. Second, the sector can benefit directly and indirectly from the actions of governments, of supernational institutions, central banks, et cetera, to mitigate the impact of the crisis on the economy. Third, the ramping up and acceleration of public works has already been included in action plans under discussion in various parts of the world. Notable, for example, are the federal spending on infrastructure in the U.S. with big numbers being thrown around and financing being discussed as well as more local state initiatives; also, the launch or relaunch of mature large projects in Greece and other parts of the world. So infrastructure spending may well provide some counterbalancing support to demand. Finally, as already mentioned by Michael, declining energy costs provide a tailwind to our results. As previously mentioned, we focus on what we can control: ensuring the safety of our people, making sure we have adequate liquidity and further working on reducing costs and improving operating cash flow. We remain vigilant and flexible to adjust further as developments warrant in any direction. At the same time as we manage the current crisis, we continue to think about the longer term in the best of TITAN traditions: taking care of our people, actively supporting local communities, positioning ourselves intelligently in the marketplace, embracing new technologies and innovating like never before and continuing efforts to reduce our carbon footprint. It is perhaps worth emphasizing in this context that we're not taking our eye off the ball in addressing the long-term climate challenge. To this end, we proactively support the recently announced road map by the European Cement Association, CEMBUREAU, which aims to achieve carbon neutrality by 2050. This concludes our introductory comments, and we are happy to take your questions. Thank you.

[Operator Instructions] The first question is from the line of Siya, Brijesh with HSBC.

I have 2 questions. First one is on your demand. So looking at Egypt and Turkey, it seems the demand is holding up quite nicely there, and they're probably not impacted and, in fact, Egypt is growing, as you say. So I mean can you throw a little more light on that? Any particular reason why that is so? And the second one is in U.S., you are kind of flagging slightly higher declines compared to other producers in the U.S. I believe that's more -- relates to the regions where you are present. But if you can provide a little more detail, that would be helpful. And the second one is on pricing. How do you see the pricing environment setting up in this weak demand -- in a weak demand market? So is that in the northern part of U.S., especially in the New York region, where you have this pricing pressure coming up from manganese? Are you seeing further pressure or it's all holding up, the Q1 level?

Let me try and take those questions in turn. First of all, on Egypt and Turkey, on Egypt, which has a way of being counterintuitive and unpredictable in many ways over the years, what seems to have happened is that in the context of the lockdown, unrecorded, unpermitted activity seems to have increased. And that, according to our people, may explain some of the change that we are seeing. We have also, I think, in many times over the past decades, seen that at times of uncertainty in places like Egypt, when people are fearful about the value of the cash in their pocket, they often choose to put it in bricks-and-mortar, which is a tradition in big families to leave a roof for your kids. So rather than keep unpredictable cash in your pocket, putting it in bricks-and-mortar is something people do more easily. So these sort of qualitative explanations, I think, may provide some of the color you're looking for in Egypt. What I'm afraid they don't do is provide any more clarity on whether they are sustainable or not. On Turkey, it's a slightly different picture. You have to remember that Turkey has already had a very big decline in consumption over the last 2 years. It's already at very low levels. It didn't have very far to fall from where it was. In Turkey, too, it's a little early to talk about a trend, even including sort of March and April results. We have seen some softening in April, much more marked around the Istanbul area, which was -- had a higher level of vigilance vis-à-vis COVID. So we are not implying that Turkey is impervious to the crisis. On the U.S. side, I think you're right. The analysis I have seen is that there is some differentiation of demand in the U.S. by region. As I think we mentioned on the call -- on our introductory remarks earlier, the New York area, which went into severe lockdown before any other area, had the highest decline. The southeast is among the areas because of the nature of their economies, a lot of traveling, a lot of tourism, where there was also more incidents and also some more decline than has been seen, say, in the middle of the country. So yes, we do think it has -- it is a regional thing more than anything else. Finally, on pricing, we are encouraged by what we see so far almost across the board. We see prices holding. There is no area where we have seen weakness at this point in time. And the price increases, for example, in the south of the country in January in Florida, a part of those are holding. So generally encouraging news on that front so far.

Sorry. Just one supplementary, how much of the price increase you have taken off beginning of the year in Florida and what the general increase in Q1 was?

I -- the announced increases did not fully go through, but $2 or $3 were added on average, we think, at this point in time. Again, those -- because the way these work is that they filter through time, you typically -- the salespeople give it -- very often give protection to some ongoing projects from price increases. So the -- any price increase filters in over time. It doesn't sort of arrive on one fine morning. But there has been sort of $2 or $3 worth there. On -- in the mid-Atlantic region, which was planning to have increases in April, as Michael said, those have been postponed at this point in time.

The next question is from the line of Betts, Michael with Data Based Analysis Limited.

I had 2 areas of questioning, if I could, please. First one was on fuel costs. Could you indicate, if you got the data, how much they dropped in Q1 and the expectation for the full year? And also leading to my second question, can you confirm that they're not included in the EUR 33 million of cost savings? And on that EUR 33 million, I'd just be a little bit interested to know how you've determined that that's the right number at this stage. It equates, I think, to about 3% of costs, correct me if I'm wrong. Is that just, in your view, a first go? I'm trying to understand how you see what might be the longer-term reduction in demand here. I mean with social distancing, presumably, progress is going to get slowed on construction sites. You talked about the decline in demand. Should we regard that EUR 33 million as very much just the first installment? I mean do you expect further significant cost savings to be made?

Thanks, Michael. Let's touch the solid fuels question first. Order of magnitude for the whole year, with higher sales volumes, we were expecting saving to the order of magnitude of EUR 20 million. Now the EUR 33 million we refer to does have an element of solid fuel saving, but that has to do over and above the EUR 20 million. There have been further decreases. And our procurement department has done a very good job in not closing the year with expensive inventories of fuel and in planning ahead and also leaving us room to make further purchases now. So it's not just the average price of solid fuels dropping, but it also has to do with the actual placing of the orders during the year. Now the EUR 33 million number has to do with an assumption on sales as well. Part of it is additional savings on fuel, and it may be EUR 4 million or EUR 5 million. Part of it has to do with the level of maintenance anticipated during the year, the remaining maintenance, the early fall maintenance. Obviously, less maintenance and stoppages are needed if sales go down and there is a slowdown in sales. In transportation, there are different dynamics in distribution when sales go down. And on the margin, we can have additional savings. And of course, on the labor front, which may be something like 1/3 of that number, there is temporary staff. There is outside contracted staff related again to maintenance. So EUR 33 million is not a hard number. It is a reduction linked to a reduction in sales volumes and production volumes.

If I may add a couple of things to what Michael said, on the fuel cost side, he referred specifically to solid fuels, so production cost. There is also a more dispersed benefit in the lower distribution costs associated with liquid fuels, which is -- we don't have a hard number on because it's fairly dispersed. But a lot of the contracts we have for distribution have fuel...

Fuel clause.

Clause. And we buy a lot of diesel or whatever. So there is another benefit there, which is a few million as well. And that referred to your first question, too. The second question on the EUR 33 million, as Michael, I think, implied in his answer and I implied in my opening remarks as well, we do feel at this point that rather than setting a long-term target in the context of high uncertainty, it is more important to have flexibility. So yes, you could look at this as a first installment. And if things deteriorate significantly, we still can do obviously a lot more than that to reduce costs. But we're also looking to retain the flexibility to be effective in the marketplace depending on how things develop.

Could I just follow up on -- and I really appreciate the uncertainties on what the volume decline might be. But one of the things that clearly is going to apply medium, longer term is this social distancing, which the contractors are telling me is going to slow down progress on site. Is that something you expect in terms of demand for your products? Or would you expect that social distancing to have an impact more as projects get out of the ground and less using your products?

One of the negative surprises I've personally had from all this is how many levels of uncertainty are still around us concerning the COVID part of what this looks like going forward, let alone the macroeconomic part. I think there's no playbook on how hotels will work, on how airplanes would work, on how construction sites would work. How about underground construction sites, for example, or [ where do you go ]? So I think, Mike, I would not dare make any assessment. I think we are still, all of us, trying to feel our way around. I think it is fair to say that initially, until we become more -- feel more secure in our assessment of the risks of the disease, it is likely that social distancing will slow down construction, same as other areas. How much? I don't know. What are the appropriate measures? I don't know. What will each government decide to do? I don't know. How well will the construction industry and the construction companies cope? I don't know. So I can't be very helpful, I'm afraid.

The next question is from our webcast participant, [ Gregoire Amar ] with On Field Investment Research. And I quote, "Dear sir, many thanks for your presentation, and congratulations for such a strong cash flow management. Today, do you see any order of decline by states in the U.S.A.? Thanks."

I do believe we have answered that question already by clarifying which states have or approximately where.

Yes. The southeast, the area we operate, is in the 10% level. And there is volatility from 1 week to the other. It has to do with the weather as well. And New York, New Jersey is gradually coming back.

The next question is from our audio participant, Woerner, Tobias with MainFirst.

I'm just looking at Egypt here at the moment. And it seems that across the industry, you have one of the best pricing levels, if I look -- see correctly, around EGP 780 per tonne, which compares to the competition at somewhat around EGP 735 to EGP 755. Can you just give me an idea of why that is and why that big differential there exists? And maybe also give me a little bit more color on Egypt. You did that before. But is there anything changing around the pressures from the supply side by any chance? That's my first question.

Let me perhaps challenge your data. I'm not sure it fully aligns with our data. The -- let me perhaps -- I don't know where you got your numbers. They don't align with our numbers. But let me perhaps make a couple of qualitative comments. First, obviously, there are, in Egypt, as elsewhere, regional differences in prices. So some parts of Egypt, which are close to cement plants with a lot of overcapacity and less demand, have lower prices than other areas of the country that have big agglomerations. Lots of consumption are far away from cement plants simply, for no other reason, because of distribution expenses. So for example, yes, we do have to have one of our cement plants in such a region. So you would expect slightly better prices in that plant, for example, versus other plants. But our other plant is in a glut region, so it has no advantage. So everything is -- there are no big differences. Second observation, I think, to your point, there has been no improvement in prices in Egypt. If anything, they are a little down year-to-year. They're still at extremely low levels and still subject to challenges from both overcapacity, which is significant, and the role that the army plants play in the country.

Okay. And my second question relates to your Southern -- or Southeast European exposure along the Balkans, a number of countries there obviously. But if you could give us an update around the COVID situation there and, clearly, most interestingly, where the production levels are now compared to what you would consider normal.

Let me say that those -- in those societies, what we have seen is, as one would expect in countries that have -- in a certain sense are less well organized and have less good infrastructure, medical or otherwise, than, say, Western European or Northern American countries, the lockdown has had more effect. So we have seen in those countries, as we pointed out, we sort of use the range, 30% to 40% decline in demand during this -- those last few weeks. So they are among the countries that are more hit by the lockdown. On the other hand, where we've seen that being lifted, we are seeing a bounce-back in those areas as well. As I pointed out earlier, it is not clear to us whether that's sort of just catching up after a period of shutdown where you have to finish off certain things you left unfinished or whether it's a return to normalcy. Again, I would caution against reading too much into the high volatility of volumes week-by-week. So it's early to say where -- how things will develop in those countries as well.

In terms of how, let's say, the sales volumes graph would look like, it would look more like a V shape. That doesn't mean that the growth will stay -- the rebound, it will be permanent or not.

We're not trying to be evasive here. We just don't know.

No, that's fair enough, Dimitri and Mike. Maybe one last question. Another company in the sector yesterday commented on Turkey, and the comments there were somewhat more cautious. How do you see the Turkish situation?

Again, I mentioned earlier, Turkey is a very big country. If you look at Istanbul, it's a very different story when you're looking at an area -- one of our operating facilities is a few hundred kilometers east of Ankara. That area is holding up better than, say, Istanbul. So again, it's a very regional play. But if we gave the impression that we think Turkey will hold up well, we didn't say that. We did say it has so far fallen less partly because it had less room to fall because it was already at a low level.

And also, the question of macro -- Turkey now is more of a macro question mark and the condition with the Turkish lira, the political situation. We are also cautious and conservative.

The next question is a follow-up question from the line of Betts, Michael with Data Based Analysis Limited.

Yes. Apologies. I had 3 more short questions if I could, please. CapEx, you're EUR 50 million lower. How much is it expected to be now for the year? Second question, on the U.S. plant maintenance, EUR 10 million hit in March this year, what was the cost in April of last year? Because I think it was in the second quarter last year, but was it again a EUR 10 million cost? And the third question, I was slightly surprised, probably my error, but Greece export volumes up in Q1. Could you -- was that just one particular contract? Because -- and could you talk about the longer-term trend or rest-of-this-year trend for export volumes? I would have thought they would be under some downward pressure, but maybe I'm just wrong.

Okay. On the Florida maintenance, yes, it was about EUR 10 million last year as well. It was in April and not in March. And that's why on a year-to-date basis, looking at the April figures, the cost, let's say, washes out. And the profitability of the U.S. on a 4-month period is about the same and maybe marginally better this year compared to last year. In terms of CapEx, again, it's suspension, postponement, not cancellation of projects. There's a number of -- and whatever had started continues, has not been stopped. There are equipment replacement spending that is what one may call long-term maintenance spending that can be delayed. There is some interference in the line. Anyway...

Oh, I'm still here. Go on.

Okay. There are some -- there are fewer conversion projects, which have been pushed back for a period. It may be just for 6 months and not for a whole year. We have to see how things go. And there have also been some expansion spending in the U.S. in ready-mix, which again has been put on ice for the time being. Now regarding export...

And so the full year CapEx without that would have been about EUR 100 million. Is -- we've gone from EUR 100 million to EUR 50 million? Is that the way to look at it?

Yes. Full year CapEx plan was about EUR 100 million -- perhaps over EUR 100 million, and already EUR 20 million was spent in the first quarter. Regarding exports, judging on a single quarter is not really -- doesn't make that much sense. The year started well. Shipments to the U.S. primarily have gone out. But in April, we had a significant decline after the outbreak of the virus. The rest of the year, we will have to see. Again, it depends how the export markets do. U.S., Western Europe primarily is where our shipments go.

The next question is from the line of Kourtesis, Iakovos with Piraeus Securities.

My first question has to do with Greece. And taking into account the hit on -- the expected hit on tourism industry this year and the fact that this will -- may have an effect on tourism infrastructure projects in Greece for this summer, would you expect a further deepening of the decline -- of the current decline in volumes in the country due to this fact? And second question has to do with Southeastern Europe. In terms of pricing, although that -- you have a 30% to 40% decline in Southeastern Europe in April demand, do you see the pricing holding out in this area? And what was the price increases, if any, that you've taken on average in Southeastern Europe in 2020?

The volume decline hasn't been that significant. I mean there was volume decline just affecting March just for a couple of weeks. Price increases in the region took place last year and also in January. It wasn't a single increase in the overall market. And there are a couple of places where there have been 2 increases: one in early -- in '19, let's say, sometime in March, April; and another one this year. So -- and those price increases have been holding, and sales have been growing pre the virus outbreak. So we feel much -- we're on the confident side that there is sustainable growth there, putting the virus impact aside.

Let me say a few words on Greece. The direct impact of the tourism story on cement consumption has been -- seems to be slightly exaggerated by your question. I'm not underestimating the indirect impact to the extent that tourism does bad in Greece, it will have a huge indirect impact on all of us, on confidence, on private building, on many other things. But the direct impact on tourism itself usually concerns building of lodges and hotels and stuff, usually happens in the winter, not in the summer in anticipation of the next season. So we do not expect any direct short -- significant short-term impact right now. But you have a fair point that looking ahead if the Greek tourism sector will take a while to recover, we should expect over the next year or 2 a significant reduction in spending around tourism. But again, as a cautionary statement, depending on how you look at it, both infrastructure spending and housing -- private housing spending are more important to demand for our products than is the tourism sector. We have highlighted it in the last few years because it was one of the few bright spots. It hasn't been the most important spot. What will determine more what happens to cement demand in Greece looking ahead is what happens to private demand, economy, and you can make your own assessment of what that looks like; and what happens with the public works and private works, anything from the Hellinikon Airport to the Hellinikon development to Kastelli Airport in Crete, to the metros, to the Piraeus Port, to road projects. There's a number of mature or almost mature products -- projects, which are important for us going forward. I hope that provides you with some more color on what Greece looks like.

[Operator Instructions] Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Colakides for any closing comments.

Okay. Thank you, everybody, for listening in. And we hope you all keep well, keep safe. The semiannual results are due to be -- due to have a conference call on the 30th of July. And I hope by then, we will all be free to move around and perhaps meet some of you before that. Thank you.

Thank you, everyone. Stay safe.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling. And have a pleasant evening.