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05 January 2018

HeidelbergCement expects negative balance sheet effect of around €200mn due to US tax reform

First publishedon www.AggBusiness.com
HeidelbergCement, the German global building materials giant, says it expects a negative balance sheet effect of around €200 million for 2017 due to major US tax reform signed off by President Donald Trump.

A company statement read: “In the USA, a fundamental tax reform has become effective on 22 December 2017. An essential element of this tax reform is the reduction of the federal corporate tax rate from 35% to 21% as of the beginning of the year 2018. In addition, the regulations regarding the utilisation of loss carryforwards were changed. As a consequence, especially deferred tax assets on losses and interest carried-forwards must be re-measured in the consolidated financial statement for 2017.

“Based on initial calculations and taking into account respective restructuring measures, we expect a negative balance sheet effect of in total about € 200 million that leads to a corresponding impact on Group net profit in 2017. The exact amount can only be computed during preparation of the 2017 group financial statements. This re-measurement of the deferred tax assets is a one-time effect that is not cash-effective and has no impact on earnings before tax or cash flow in 2017.

“The outlook of a significant increase of 2017 group share of profit before one-time effects remains unchanged. The write-down has no impact on the communicated, progressive dividend policy that is likewise based on the group share of profit before one-time effects.”

HeidelbergCement assume that, starting in the year 2019, the significant reduction of the effective tax rate in the USA will have a positive effect on the Group’s net profit and cashflow.

Companies in this article

HeidelbergCement
www.HeidelbergCement.com
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