HeidelbergCement

HeidelbergCement's turnover declined by 7.6% in the first quarter to €2,179.7m and the EBITDA was down by 15.0% to €171.4m. At the trading level, there was a swing from a €11.3m profit into a €18.2m loss. The net interest charge increased by 5.7% to €144.6m and the pre-tax loss increased by 11.7% to €217.8m and the net attributable loss more than trebled to €198.9m. Capital investment was reduced by 11.6% to €117.4m, while spending on acquisitions dropped from €9.9m to €3.8m, with capital investment for the full year expected to amount to about €850m. Net debt was 0.4% ahead at €12,125m to give a gearing level of 141.1%, compared with 140.3% a year earlier. Cement and clinker shipments declined by 5.4% to 15.2Mt. Within this, international trading volume rose by 26.9% to 2.3Mt, with cement only marginally ahead and virtually all the increase coming from clinker trading. Shipments of aggregates declined by 9.5% to 40.3Mt, while ready-mixed concrete deliveries were 8.8% lower at 6.9m m³ and the asphalt volume fell by 21.7% to 1.4Mt.

In Western & Northern Europe, the turnover declined by 13.8% to €714m and the EBITDA dropped by 85.3% to just €8m. Turnover in cement declined by 8.2% to €298m and the EBITDA margin slumped from 10.2% to 3.3%. Cement and clinker deliveries fell by 19.5% to 3.6Mt. The most pronounced reductions took place in Denmark, Norway, Estonia and Latvia as well as in British sales of ground-granulated slag. Swedish volumes were more or less maintained, thanks to increased clinker exports. In aggregates, volumes declined by 12.4% to 12.1Mt and the turnover was off by 3.1% to €146m, with the margin declining from 14.0% to 8.1%. Only in Great Britain were volumes maintained. Ready-mixed concrete deliveries fell by 16.0% to 2.2m m³. Asphalt operations, which are primarily in Great Britain, saw volumes increase by 2.8% as winter damage to roads was being dealt with. Building products returned to profit, though the turnover fell by 25.8% to €85m.

Eastern Europe & Central Asia saw turnover drop by 32.1% to €139m and the EBITDA moved into negative territory with a loss of €7m. Cement turnover fell by 35.4% to €108m and the EBITDA margin slumped from 8.4% to 1.2%. Cement deliveries were 34.6% lower at 1.7Mt and cement volumes declined in all countries, with the exception of Kazakhstan and Georgia. However, Russia began to show signs of picking up in March. Poland should do well this year, as soon as the winter is past and a cement price increase has been announced. While cement sales in Romania are expected to continue to fall, the group expects an improvement in aggregates sales there. In aggregates, volumes were 26.4% lower at 1.7m and the turnover fell by 20.7% to €10m while in ready-mixed concrete deliveries declined by 18.2% to 0.5m m³.

North American turnover fell by 19.9% to €497m and the EBITDA loss widened from €2m to €12m, reflecting the difficulties in the US market, both in terms of economic performance and weather conditions. The cement turnover declined by 16.9% to €158m, as shipments were reduced by 14.6% to 1.8Mt, but the EBITDA margin improved from 12.1% to 15.7% thanks to higher volumes and prices in British Colombia and in the Prairie provinces. Aggregates declined by 5.1% to 15.9Mt and margins deteriorated from a negative 2.6% to a negative 3.9% on a turnover that was 9.0% lower at €135m. Ready-mixed concrete deliveries were down by 17.1% to 1.1m m³. In building products, the turnover dipped by 26.1% to €131m and losses increased.
 
The Asia-Pacific area showed the strongest performance, with turnover advancing by 19.1% to €568m and the EBITDA growing by 43.6% to 161m. In cement, turnover grew by 40.2% to €344m and the EBITDA margin improved from 30.1% to 36.6% as cement and clinker shipments advanced by 17.2% to 6.1Mt. Indocement, which is in the process of commissioning two new cement mills with a combined capacity of 1.5Mt, had to reduce exports in order to satisfy the increase in domestic demand. The two joint ventures in China boosted cement volumes by 8.3%, and volumes in Bangladesh also showed a good increase, but Indian volumes were slightly lower. In aggregates, turnover improved by 16.1% to €91m on volumes that were 9.1% lower, and the margin narrowed from 32.5% to 29.8%. In ready-mixed concrete, volumes were almost maintained at 2.0m m³.

In Africa and the Mediterranean rim, turnover eased by 0.3% to €216m and the EBITDA was static at €37m. Group sales of cementitous materials advanced by 2.1% to €150m as cement shipments grew by 19.7% to 2.0Mt and the EBITDA margin widened from 20.1% to 22.0%. African cement deliveries rose by 7.8%, thanks to good performances in Ghana, Togo, Sierra Leone and Tanzania. The Akçansa joint venture in Turkey increased cement and clinker volumes by 50.8%, thanks to higher volumes for both domestic sales and export volumes. In aggregates, margins narrowed from 21.0% to 16.1% as turnover that declined by 13.7% to €19m as volumes fell by 9.2% to 3.3Mt, with falling demand for aggregates and concrete in Spain being the main negative factor. Deliveries of ready-mixed concrete were helped by the improved demand in Turkey and rose by 9.7% to almost 1.2m m³.

HeidelbergCement is expanding its African activities with the help of IFC, Agence Française de Développment and other investors. Initially, IFC and its partners will subscribe US$60m of new equity for Scancem International, the Norwegian subsidiary of HeidelbergCement that runs the group's African operations. Eventually, as much as US$180m might be injected in what will remain a minority participation. One of the first uses of the additional funding will be to increase the cement milling capacity in Liberia. Further projects under consideration include additional cement investments in Ghana, Togo and Gabon. These projects should all be well under way by 2013 and cover both additional milling and kiln capacities.