Holcim: “significant increase” in operating profit for Q1, 2014

680 Holcim has reported a significant increase in operating profit for the first quarter of 2014 along with a further increase in operating margins and like-for-like higher volumes and net sales.

Net sales across the group reached CHF 4.09 billion (€3.36 billion), a fall of 5.4%, which was mainly influenced by negative currency effects. On a like-for-like basis net sales were up 7.8%.

Consolidated operating EBITDA decreased by 5.1% to CHF 617 million but grew by 10.1% adjusted for foreign exchange effects and changes in consolidation.

Driven by higher sales, most European Group companies reported higher operating EBITDA and North America as well as Africa Middle East recorded better operating results.

Operating profit came to CHF 295 million, an increase of 9.3%. On a like-for-like basis the growth in operating profit reached 28.4%.

Net income, which in the first quarter of 2013 benefited from the sale of a 25% stake in Cement Australia, decreased by 39.5% year-on-year and reached CHF 179 million. Adjusted for this transaction in 2013 net income was up by 19.6%.

Over the last year Holcim succeeded in further reducing net financial debt by CHF 718 million from CHF 10.8 billion to CHF 10 billion.

Holcim increased like-for-like sales volumes in all segments in the first quarter of 2014, with particularly strong results from Europe where mild weather conditions led to dynamic building activity. The market situation in India began to stabilise, translating into stable cement volumes, and Mexico gradually recovered from the low volume base registered in the second half of 2013. Like-for-like net sales were up in all group regions.

Consolidated cement sales increased by 2.9% to 33 million tonnes in the first quarter, mainly attributable to group region Europe, where France, Germany, and Russia reported the strongest increases. Aggregate volumes increased by 2.2% to 29.2 million tonnes, mainly due to higher results in Europe. In ready-mix concrete volumes contracted by 2% to 8.2 million m³ as increases in a number of European countries could not make up for the lower volumes resulting from the segment’s restructuring in 2013. Asphalt volumes reached 1.4 million tonnes, an increase of 23.3%.

Holcim says that plans to merge with 725 Lafarge, announced on 7 April 7, 2014, “will deliver compelling benefits for all stakeholders.” For 2014 Holcim expects the global economies to show another year of uneven performance. Construction markets in Europe are expected to have reached the bottom with slow recovery in sight. At the same time, North American markets are expected to continue to benefit from a further recovery especially in the United States. Latin America on the other hand could continue to face uncertainties in Mexico but should overall show slight growth in 2014. The Asia Pacific region is expected to grow although at a comparatively slower pace than experienced in recent years. Africa Middle East is expected to gradually improve.