Holcim 1Q held back by input and energy costs

Holcim 1Q held back by input and energy costs
Published: 04 May 2011

Holcim reported higher first-quarter sales volumes in all segments, with price adjustments in several markets, however, the company said this was not enough to fully absorb the above-average cost increases for raw materials and energy sources, such as coal and petcoke, as well as for distribution.

Consolidated cement deliveries rose by 7.2 per cent to 33.2Mt in the first quarter of 2011. The largest volume increases were achieved in Asia Pacific followed by Europe and Latin America. Aggregate sales were up by 16.3 per cent to 34.3Mt due to improved demand in all group regions with the exception of Africa Middle East. All group regions contributed to the increase in deliveries of ready-mix concrete by 9.8 per cent to 10.4Mm3.

Net sales remained quite stable at CHF4.7bn (-18.8 per cent) while operating EBITDA decreased by 17.1 per cent to CHF753m for the aforementioned reasons. Internal operating EBITDA development of the group was negative at -9.1 per cent. Due to seasonal factors, cash flow from operating activities came to CHF -538m.

Net income increased by 85.1 per cent to CHF 122m, and the share of net income attributable to shareholders of Holcim Ltd rose by 114.2 per cent to CHF10m. However, the previous year’s first quarter had a non-recurring cash-neutral tax charge of CHF182m in connection with the restructuring of the Group’s interests in North America and no CO2 emissions certificates have been sold yet in 2011. In the previous year, this amounted to CHF65m.

Going forward, Holcim still believes that the construction sector in the mature markets will recover and that the growth in the emerging markets will continue.

“The Board of Directors and the Executive Committee are confident that the Group will be successful in securing its share of future growth in the emerging markets, and that its lean cost structures will enable it to benefit above average from continuing economic recovery in Europe and North America,” the company said in a statement.