Holcim third-quarter net profit falls

Holcim third-quarter net profit falls
Published: 10 November 2010

Holcim said its third-quarter net profit fell 19.2 per cent with the company saying its markets in the United States, Mexico, Eastern Europe and India suffered the biggest setback.

The company says net profit attributable to shareholders was SFR544m (US$561m) during the quarter, down from SFR673m in the same period last year. EBITDA fell 16 per cent to SFR1.234bn.

Consolidated cement deliveries increased by 3.7 per cent to 102.8Mt in the period to end-September. The biggest increases were posted by Ambuja Cements in India and the Group companies in Brazil and Thailand. Cement Australia was fully consolidated in this reporting period for the first time. Sales of aggregates were up 15.1 per cent at 118.8Mt, while for ready-mix concrete there was a rise of 13.2 per cent to 34.4Mm3. The increase in these segments was primarily attributable to the newly consolidated Holcim Australia. Sales of aggregates were down slightly on a comparable basis, and volumes of ready-mix concrete remained at the year-back level.

Holcim expects the European and North American construction markets – which contribute almost half its sales – to stay subdued and said it would be challenging for the group to match the previous year’s operating EBITDA of SFR4.63bn.

The company warned that meeting last year’s key profit levels will be a challenge after third-quarter income was hit by sliding Indian cement prices due to a harsh monsoon.

Holcim holds 46 per cent stakes in both ACC Ltd and Ambuja Cements Ltd, India’s second and third-biggest cement producers, making it the European cement group most exposed to India. Both already reported a weak third quarter.

Holcim said it was hit by falling prices in important markets, including India, Europe and the United States, and higher variable production and distribution costs.