Asia provides some support for HeidelbergCement

Asia provides some support for HeidelbergCement
Published: 31 July 2009

HeidelbergCement’s first half turnover declined by 22.5% to €5,369.9m and the EBITDA fell by 35.2% to €836.2m.  The trading profit deteriorated by 49.3% to €456.9m, while the pre-tax profit dropped by 72.0% to €161.9m after, among other items, a net interest charge 21.0% lower at €290.6m.  Net debt at the end of June was 8.8% lower at €11,302m to give a gearing level of 124.2%, compared with 144.2% a year earlier.  Capital expenditure in the six months amounted to €274m, a reduction of 39.5%, while spending on acquisitions fell by 77.5% to €16m.  Cement and clinker deliveries were down by 15.1% to 37.7Mt, while aggregates shipments fell by 25.3% to 108.3Mt and ready-mixed concrete deliveries declined by 24.4% to 16.8Mm³, with asphalt sales being 9.8% lower at 4.4Mt. 
 
The group’s European business area saw turnover fall by 30.2% to €2,543m and the EBITDA was 48.0% lower at €386m, with the trading profit dropping by 61.3% to €210m.  Sales of cementitious materials declined by 20.5% to 17.01Mt, with volumes notably lower in all countries bar Sweden, where increased export shipments allowed the tonnage to be maintained.  Cold weather during the first four months had a further negative effect on cement shipments.  Lower steel production in Germany reduces the availability of slag, pushing up the clinker content of the cement.
 
North American turnover fell by 23.5% to €1,420m, though in dollar terms the drop was more significant at 33.3%, and the EBITDA dropped by 53.4% to €111m and a €24m loss was incurred at the trading level.
 
In the rest of the world the reduction in turnover was a modest 0.8% to €1,369m and the EBITDA improved by 5.7% to €316m and the trading profit by 7.3% to €248m.  Cement shipments were just 1.4% lower at 15.94Mt, but the downstream operations showed greater degrees of reduction with the aggregates tonnage declining by 12.6% to 16.59Mt, ready-mixed concrete deliveries by 10.2% to 4.77Mm³ and asphalt by 10.0% to 1.3Mt.  The negative effect came mainly from Australia, with an 11.7% reduction in EBITDA to €55m.  In Asia, the EBITDA improved by 9.1% to €212m, helped by a strong performance in China, where two new production lines were available in the northern province of Shaanxi, and in Indonesia, where in spite of lower volumes, prices and margins have improved.