Holcim closes capacity in the USA and Spain

Holcim closes capacity in the USA and Spain
Published: 13 November 2008

Holcim’s turnover for the first nine months declined by 4.7% to SFr19,340m (EUR12,012m), though on a like-for-like basis there was a 6.6% increase.  The operating EBITDA fell by 18.3% to SFr4,365m (EUR2,711m). The trading profit was down by 22.1% to SFr3,087m (€1,917m) and the net attributable profit dropped by 47.3% to SFr1,739m (EUR1,080m) as there had been an exceptional gain on selling 85% of the South African business last year.  The net debt at the end of September was 9.5% higher at SFr15,881m (€10,051m), giving a gearing level of 77.7% compared with 66.7% a year earlier. Capital investment in the period amounted to SFr2,835m (EUR1,794m) and SFr929m (EUR588m) was spent on acquisitions.  
In addition to the new capacity coming on stream this year, there is 17m tonnes of new capacity being added in 2009 and a further 6m tonnes in 2010.  Group cement shipments were 3.5% lower at 108.8Mt, which represents an underlying improvement of 0.7%.  Sales of other binders were down by 11.9% to 3.7Mt. Shipments of aggregates declined by 7.1% to 127.3Mt, while ready-mixed concrete deliveries were boosted by acquisitions and advanced by 10.1% to 37.0m m³, but the asphalt volume was 1.9% lower at 10.3Mt.  
The European turnover advanced by 2.0% to SFr7,927m (EUR5,017m) but the EBITDA declined by 6.5% to SFr1,715m (EUR1,085m).  Cement deliveries edged ahead by 0.4% to 26.2Mt.  Spanish cement shipments were sharply lower and the 0.3m tonnes per annum Torredonjimeno works has been closed, while some loss of volume was also seen in Great Britain and in Italy.  Elsewhere, cement shipments increased, particularly in Romania, Bulgaria and Azerbaijan as well as by the Slovakian subsidiary, both domestically and in terms of exports to neighbouring countries.  Aggregates deliveries declined by 3.0% to 74.1Mt, with lower volumes in Spain and Great Britain to a large extent offset by increases elsewhere, including acquisition benefits in Germany.   Shipments of ready-mixed concrete and asphalt both increased by 8.1% to 16.1m m³ and by 11.1% to 5Mt respectively.  Ready-mixed concrete deliveries were ahead in most countries, with British volumes boosted by an active London market and Spain getting some benefit from the initial consolidation of Tarmac Iberia. 
Asia Pacific turnover declined by 1.7% to SFr4,599m (EUR2,856m), largely because of currency movements, and the underlying turnover was ahead by 11.2%.  Higher energy and transport costs led to an 18.4% reduction in the EBITDA to SFr1,137m (EUR706m), with the profit reduction being particularly notable in India, where clinker also had to be purchased. Cement deliveries increased by 1.2% to 49.1Mt.  Volumes were lower in Thailand and New Zealand, but otherwise ahead, in spite of difficult conditions in India, Sir Lanka and Bangladesh.  In Vietnam, cement deliveries were substantially ahead and a grinding centre was acquired.  Holcim’s ready-mixed concrete deliveries rose by 34.1% to 5.5m m³, boosted by substantial growth in urban markets in India and in South East Asia.  Aggregates sales rose by 16.7% to 3.5m tonnes, with the strongest growth coming from Indonesia.  
North American turnover fell by 16.0% to SFr3,373m ( EUR2,095m) and the EBITDA dropped by 42.4% to SFr444m ( EUR276m).   Cement shipments declined by 9.7% to 11.24Mt, with most regions in the USA in decline, in particular the Mississippi and Great Lakes regions, but Canada registering a 1.4% improvement.  The forthcoming closure of the Dundee works in Michigan and the Clarksville works in Missouri will eliminate 2.2Mt of old capacity before the modern 4Mta Ste. Genevieve goes on stream towards the end of next year.  Aggregates shipments fell by an underlying 13.5% to 37.7Mt, but ready-mixed concrete deliveries were 3.8% ahead at 5.5Mm³ thanks to acquisitions, but at the underlying level there was a 7.5% reduction.