HeidelbergCement - strong results in Asia and Africa

HeidelbergCement - strong results in Asia and Africa
Published: 18 March 2010

HeidelbergCement’s turnover declined 21.6% to €11,117m in 2009 while the EBITDA fell by 28.7% to €2102m and the trading profit was down by 38.7% to €1317.3m. Although net interest payments were 13.8% lower at €636.2m, the total financial charge rose 5.3% to €874.9m and a pre-tax loss of €14.5m was incurred. After tax credits and capital items, a net attributable profit of €42.6m was achieved, a 97.6% drop. The net debt at the end December was reduced by 27.2% to €8423m, helped by the rights issue and the gearing fell from 139.8% to 76.5%. Capital investment was reduced 34.4% to €821m and further cost savings amounting to some €300m are expected from recent measures.

Group sales of cementitious materials declined 10.9% to 79.3Mt, with the international trading volume being down 18.1% to 8.1Mt. The group’s global cement capacity now stands at about 110Mt. In Western and Northern Europe, turnover fell 22.7% to €3874m and the EBITDA by 29.2% to €687m. Sales of cementitious materials declined 17.3% to €1607m, those of aggregates by 22.9% to €754m and those of other construction materials by 21.2% to €523m. Volumes were particularly weak in Great Britain and in the Baltic states, but held up relatively well in Germany. Only in white cement, manufactured in Belgium, did volumes improve. Margins in cement were ahead in Germany and Britain but suffered badly in Estonia and Latvia. Although the clinker volume from the Swedish and Norwegian works did increase, this could not compensate for the drop in cement exports. The tonnages were down by 16% in cement to 21Mt and 16.5% to 69.6Mt in aggregates.

In Eastern Europe and Central Asia, turnover fell 37.6% to €1285m and EBITDA dropped 49.2% to €361m. The turnover in cement was down by 38.9% to €1004m and that of aggregates by 31.6% to €121m, with exchange rate movements having accentuated the negative trend. Poland held up well and produced its second best result ever, while the Ukraine, Russia, Georgia and Kazakhstan were the worst hit.
North American turnover fell 26.9% to €2892m and EBITDA dropped 49.7% to €340m. The turnover in cement fell by 25.2% to €851m. Deliveries of cementitious materials were down by 25.9% to 10.1Mt. Costs were reduced by increasing the portion of alternative fuels used and by reducing stocks, maintenance and working hours as well as shutting kilns for prolonged periods.

The Asia-Pacific turnover improved by 1.6% to €2211m and the EBITDA rose 32.5% to €612m. Cement turnover advanced 28.7% to €281m. Record results were achieved in Indonesia, Bangladesh and China, while the Australian and Malaysian results were almost maintained thanks to reduced costs. Cement volume rose 9.4% to 25.5Mt. This year should see the commissioning of two new cement mills at the Cirebon works in Indonesia, raising cement capacity there by 1.5Mta. Next year, an additional 0.8Mt of cement capacity should come on-stream in Bangladesh and by the end of 2012 a further annual capacity of 2.9Mt should become available in India.
In Africa and the Mediterranean area, turnover was down 14.1% to €837m and the EBITDA declined 13.7% to €15.7m. Turnover in cement was 10.3% lower at €555m and represented a volume of 7.3Mt, a reduction of 0.2Mt. Helped by strong performances in Ghana and Tanzania, record results were obtained in Africa. In Tanzania, this was helped by the commissioning of the 1Mt of new cement capacity. Further growth and stable pricing is expected in the group’s African markets this year. The weak domestic cement demand in Turkey was partially compensated for by higher export volumes.