Asia is showing the most positive signs within HeidelbergCement

Asia is showing the most positive signs within HeidelbergCement
Published: 05 November 2009

HeidelbergCement’s turnover in the first nine months declined by 22.4% to €8,390.6m and the EBITDA was off by 25.7% to €1,606.2m.  At the trading level, the profit was down by 34.8% to €1,086.6m and with the net interest charge down by 23.4% to €418.2m but other financial charges being considerably higher at €201.4m and the pre-tax profit fell by 59.5% to €442.4m and the net attributable profit dropped by 78.9% to €419.3m.  Thanks to the rights issue in September, net debt at the end of September was 27.0% lower at €8,971m and the gearing level continued to decline, standing at 81.9% compared with 128.9% a year earlier and 193.4% two years ago.  Capital investment fell by 42.5% to €401m in the period, while spending on acquisitions dropped by 82.4% to just €18m.  Group cement and clinker shipments declined by 13.5% to 59.2Mt.

The European business area produced a turnover 28.6% lower at €4,005m and the EBITDA declined by 35.8% to €776m, with currency weakness outside the euro area also depressing the numbers.  Cement, clinker and ground granulated slag volumes were off by 18.7% to 27.2Mt, with the most notable reductions being in Eastern Europe, while British volumes showed signs of stabilising at a low level.  Recovery is now being seen in some markets such as Poland, but will be much later in the Ukraine and Russia.

In North America, turnover declined by 24.1% to €2,277m and the EBITDA fell by 41.1% to €280m.  North American cement deliveries fell by 26.7% to 7.82Mt.  While the rate of decline appears to be slowing, long lead times in public sector contract awards has meant that there are, as yet, no benefits to be seen from increased public sector construction spending.  Cement prices are declining in California and in Florida, but are generally slightly positive elsewhere.  An expected US cement volume increase of 5% to 6% in 2010 should help the pricing scene.

In Asia, Australia and Africa the turnover was down by a mere 2.6% to €2,054m and would actually have been slightly higher in constant currency terms.  The EBITDA did improve and rose by 12.8% to €522m.  Cement and clinker shipments declined by 0.6% to 24.19Mt and other products showed stronger negative tendencies, with aggregates volumes down by 10.0% to 25.58Mt, ready-mixed concrete deliveries being off by 8.1% to 7.43Mm³ and asphalt by 11.4% to 1.83Mt.  The profit improvement came essentially from Asia, where the EBITDA rose by 17.5% to €357m.  Helped by two new production lines, cement deliveries by joint ventures in China rose by 65%.  Indocement improved its profit contribution in spite of lower cement volumes thanks to reduced costs.  Volumes and profits improved in Bangladesh, while in India profitability improved on unchanged volumes.