HeidelbergCement affected by US and British housing
Helped by the consolidation of Hanson, HeidelbergCement’s turnover first half rose by 66.5% to EUR6927.7m and the EBITDA increased by 45.8% to EUR1276.5m. The trading profit improved by 36.8% to EUR887.7m, but after a 234.6% increase in the net interest charge EUR372.3m, the pre-tax profit dropped by 60.5% to EUR578.8m. Net debt at the end of June stood at EUR12,389m to giving a gearing level of 144.2%, down from 193.4% at the year-end. Capital expenditure in six months amounted to EUR452m, 25.6% higher than a year ago, while EUR72m were spent on acquisitions, mainly on shares in Indorama Cement in India. Cement and clinker deliveries were 8.0% higher at 44.4Mt, with aggregates shipments jumping by 244% to 145.4Mt as a result of the 96.9Mt coming from Hanson. The rise in energy costs makes HeidelbergCement look for increases in cement prices in 2009 over 2008 of 10% to 25% depending on the market, and to increase the use of secondary duels and reducing the clinker content in cement.
The group’s European area increased turnover by 62.1% to EUR3,644m and the EBITDA emerged 46.6% higher at EUR233m. Sales of cementitous products were 8.9% higher at 21.42m tonnes, with good volume growth in eastern Europe, the Nordic area and the Benelux and Germany being slightly higher, while British cement deliveries declined. Exports from Germany increased, principally to Poland and Russia. Before taking the Hanson effect into account, aggregates shipments were up by 27.8% to 36.8m tonnes, while including Hanson there was a 116.3% jump to 62.38Mt. Underlying aggregates shipments increased in Eastern Europe, Germany and the Benelux, while they declined in Great Britain and, rather more so, in Spain. Ready-mixed concrete deliveries rose by 84.7% to 12.09Mm³, with Hanson contributing some 4.6Mm³, with deliveries excluding Hanson rising by 14.7%. Building products, with its large exposure to the British residential market through Hanson, is having a difficult time and is reducing capacity.
North American turnover was boosted by the consolidation of Hanson and rose by 65.3% to EUR1,855m and the EBITDA emerged 10.2% higher at EUR237m. Cementitous deliveries were 1.3% down at 6.83Mt, which represents an underlying decline of 10.3% and cement imports were reduced, while maintaining full production at the American cement plants. Demand in western Canada remains strong, though deliveries were delayed by harsh weather.
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