March 27, 2014 / 4:26 PM / in 4 years

UPDATE 1-Italy's Buzzi Unicem says Ukraine will hold back earnings

(Adds details on Ukraine)

MILAN, March 27 (Reuters) - Italian cement maker Buzzi Unicem expects the crisis in Ukraine to limit an expected improvement in recurring core earnings this year driven by a healthy U.S. market and budding recovery in Europe.

The Piedmont-based company swung to a net loss of 29 million euros ($39.98 million) in 2013, hit by a 114 million euro impairment charge including writedowns of fixed assets both in Italy and abroad.

Buzzi Unicem, which runs plants in both Ukraine and Russia, wrote off almost 40 million euros worth of plants and goodwill in the country at the centre of a standoff between the Kremlin and Western countries.

Recurring earnings before interest, tax, depreciation and amortisation (EBITDA) rose 1.9 percent last year to 456 million euros as strong U.S. and Central European markets more than offset weakness in Eastern Europe, Mexico and Italy.

Buzzi expects 2014 recurring EBITDA to be in line or slightly above last year‘s.

The depreciation of Ukraine and Russia’s currencies hit revenues generated in the two countries last year and could damage earnings this year.

“Should the devaluation of the (Ukrainian) currency, which has already lost more than 30 percent compared with 2013, continue in the next months, operating results once converted into euros will very likely be lower than in the previous year,” Buzzi said.

Sales in Ukraine and Russia accounted for 4.5 percent and 9 percent respectively of Buzzi’s total sales last year.

The company proposed a dividend of 0.05 euros per share.

Shares in Buzzi were down by 1.6 percent at 1559 GMT against a flat Italian blue-chip index. ($1 = 0.7254 Euros)

Reporting by Francesca Landini; Editing by David Goodman

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