Holcim

Holcim increased cement deliveries by 4.1% to 67.8m tonnes in the first six months of 2010. Shipments of aggregates rose by 17.1% to 73.2m tonnes, boosted by the purchase of the former Australian interests of Cemex, without which volumes would have been off by 0.5%. Although stable at the underlying level, ready-mixed concrete volumes were also boosted by the Cemex deal and rose by 13.5% to 21.9m m³. Asphalt sales advanced by 2.3% to 4.4m tonnes. Turnover improved by 8.1% to SFr10,902m (€7,624m) and the running EBITDA rose by 9.3%, or by 2.0% at an underlying level, to SFr2,343m (€1,638m). The trading profit rose by 8.4% to SFr1,416m (€990m), but the net attributable profit did fall by 37.2% to SFr331m (€231m), in part reflecting a non-cash tax liability of SFr186m (€130m). Net debt at the end of June was 12.3% lower than a year earlier at SFr14,075m (€10,663m), giving a gearing of 63.0%, down from 82.0% a year earlier. Capital investment in the six months was 39.1% lower at SFr693m (€485m), with maintenance capital expenditure being 8.1% higher at SFr120m (€74m), but spending on acquisitions fell by 80.9% to just SFr79m (€55m).  

European turnover contracted by 8.3% to SFr3,304m (€2,310m), not helped by a weaker euro against the Swiss franc, and the EBITDA came down by 10.6% to SFr500m (€350m). Cement shipments were 7.7% lower at 12.0m tonnes, the aggregates tonnage declined by 1.3% to 37.5m tonnes and ready-mixed concrete deliveries by 6.0% to 7.8m m³. Cement deliveries did improve somewhat in France, the Czech Republic and Slovakia, as well as in Azerbaijan and were stable in Switzerland, but declined in all other European markets.  The worst performances were seen in Bulgaria, Romania and Croatia with reductions of respectively 48.5%, 36.2% and 30.0%. Average domestic cement prices declined by 4.4%, with the sharpest falls being in Bulgaria (-23.3%) and Italy (-20.9%) and only in Serbia was there an increase in local currency terms (+8.7%). With the drop in Bulgarian cement demand and the increased import pressure, the Pleven works is now expected to be closed during 2011, with clinker production already having been stopped and clinker brought in from the larger Beli Izvor works. The damage caused by fires may delay many investment programmes in Russia. Aggregates volumes were off by in excess of 20% in Bulgaria, Romania, France and Spain, though in France the average selling price did improve by 16.4% and Romanian prices rose by 14,3%. Aggregates shipments in Switzerland rose by 20.0% and by just over 110% in Great Britain and in Belgium.

The Asia Pacific area was boosted by an increased sphere of consolidation, essentially the Cemex deal already discussed, and the turnover advanced by 36.2% to SFr4,195m (€2,934m) and the EBITDA by 22.8% to SFr1,072m (€750m). Cement deliveries increased by 7.0% to 36.5m tonnes, with the strongest volume increases being seen in Sri Lanka (+34.3%), Indonesia (+19.7%), the Philippines (+18.2%) and Bangladesh (+13.3%), while only New Zealand and, in the case of domestic deliveries, Australia reported lower volumes. The average cement price improved by 7.0% in Australia and declined by 10.6% in Sri Lanka and by 5.9% in Vietnam. Otherwise, price movements were less than 2%. Of the two Indian group companies, Ambuja Cements had the benefit of additional kiln and grinding capacities and increased production by 10.1% and deliveries by 9.5% to 10.80m tonnes, while ACC saw a 1.6% decline to 10.88m tonnes. The strength of domestic demand lead to reduced export volumes for both the Indonesian and Philippine arms of Holcim. A new 1.6m tonnes cement works is being built in Indonesia for completion in early 2013. In aggregates, where Australia and Indonesia are the main contributors, and both reported lower volumes and some weakening of average prices.  

Latin American turnover improved by 3.0% to SFr1,725 (€1,206m), but the EBITDA declined by 3.7% to SFr523m (€366m). Cement deliveries were 0.9% lower at 11.2m tonnes, while aggregates shipments and ready-mixed concrete deliveries were stable at 5.9m tonnes and 4.9m m³ respectively. Central America was affected by the weak US economy, with domestic deliveries in Mexico being off by 7.3% and bigger reductions being seen in El Salvador and Costa Rica. Cemento Polpaico in Chile suffered from increased competition, leading to reduced volumes and prices. The Brazilian market was strong and Holcim increased volumes there by 20.9%, while in Argentina domestic deliveries rose by 9.7% and clinker exports to Paraguay and Bolivia increased. Additional capacity is being considered for Brazil in view of the growth in that market. In aggregates, both volumes and prices improved in Mexico and Brazil, the two most important markets.

The North American turnover declined by 2.8% to SFr1,405m (€983m) but the EBITDA recovered by 64.7% to SFr140m (€98m), helped by the lower production costs at the Ste. Genevieve works and improving demand in Canada. Thanks to higher Canadian shipments, North American cement deliveries were stable at 5.0m tonnes. A 1.1% reduction in the average price in Canada was of little consequence when volumes rose by 21.1%. The US market was much more difficult, with volumes declining by 3.9% and prices falling by 5.7%. Downstream volumes were also helped by the Canadian exposure and aggregates volumes improved by 1.3% to 15.5m tonnes and ready-mixed concrete deliveries by 8.7% to 2.5m m³.  

The African and the Middle Eastern turnover shrunk by 3.6% to SFr596m (€417m), but the EBITDA improved by 12.4% to SFr209m (€146m). Cement deliveries improved by 4.4% to 4.7m tonnes and sales of aggregates improved by 8.3% to 1.3m tonnes but ready-mixed concrete deliveries were down by 16.7% to 0.5m m³. Sales of cement and aggregates increased in Morocco, but ready-mixed concrete deliveries declined, while Lebanese volumes were ahead across the board. Lower returns have been seen from the operations based around the Indian Ocean.