Italtile is expecting a sharp decline in earnings for the year to end-June as its manufacturing business Ceramic Industries comes under severe pressure from cheap imports, weak demand and rising costs.The home improvement materials group said on Tuesday that HEPS for the year is expected to fall between 7.5% and 12.4% from 125.1c in the previous year while EPS is expected to fall by 12.7%. Ceramic Industries was the main drag on the group’s performance, despite relatively stable trading across most of Italtile’s other businesses.The company said the tile manufacturing industry continued to face excess global supply, cheaper imported products and weak demand. These conditions had contributed to continued price deflation, putting pressure on manufacturers’ margins.“The manufacturing imbalance, intense competition, and demand constraints have continued to drive price deflation.”Ceramic Industries’ combined manufacturing sales with Ezee Tile Adhesive Manufacturers declined 1% compared with the previous year. However, margins at Ceramic Industries remained under severe pressure because of market pricing and higher energy-related costs.Italtile said rising transport, fuel, gas and municipal costs had added to the pressure on manufacturing margins.The company’s comments come as the International Trade Administration Commission of South Africa (Itac) announced provisional anti-dumping duties on ceramic and porcelain wall and floor tiles in July.Italtile said the duties followed global overcapacity and the dumping of cheaper products in South Africa and other African markets, introducing trade barriers to protect their own industries.Even with the pressure in manufacturing, Italtile’s retail businesses were more resilient.System-wide retail turnover at CTM, Italtile Retail and TopT was stable compared with the previous year, it said. Italtile Retail recorded improved sales and volumes, while CTM remained stable despite a weaker second half after the franchising of four shops. TopT recorded modest sales growth.The group’s online shops also performed well, with higher traffic and sales supported by improved digital content and a more personalised sales experience.Sales in its integrated import supply chain businesses fell 6%, but Italtile said this was offset by improved margins from exchange-rate gains and better buying.“Though the current macro environment does not support rapid topline growth, we remain focused on the factors within our control: maintaining lean, efficient, cost-competitive and flexible operations,“ it said.“We are also strengthening our long-term fundamentals by responding to market needs, using our world-class technology to improve quality and drive product innovation, enhancing selling skills and delivering an exceptional customer experience.”The group will publish its full-year results on or about August 24.Business Day