HeidelbergCement’s first quarter shows good underlying growth outside the USA

HeidelbergCement’s first quarter shows good underlying growth outside the USA
Published: 09 May 2008

Helped by the consolidation of Hanson, the first quarter results from HeidelbergCement show a 71.8% increase in turnover to HeidelbergCement’s first quarter shows good underlying growth outside the USA3,062.3m and the EBITDA advanced by 52.3% to EUR385.2m.  The trading profit improved by 33.1% to EUR189.6m, while the lower contribution from associates and substantially higher interest payments led to an 89.7% drop in the pre-tax profit in the seasonally weak first quarter.  Capital investment was 55.9% higher at EUR198m, while the spending on acquisitions was almost halved to EUR54m, a notable portion of which was spent on buying out minorities in Indocem.  Net debt of EUR12,155m gave a gearing level of 149.3%, compared with 55.5% a year earlier, but a useful reduction on the 193.3% at the end of December. 

The cement and clinker volume sold was 9.9% higher at 19.6Mt, or up by 4.1% excluding acquisitions.  International trading volumes in cement declined by 66.8% to 0.6Mt, but clinker shipments rose by 41.0% to 1.6Mt.  Shipments of aggregates jumped by 271% to 61Mt, of which Hanson contributed 41.4Mt, and ready-mixed concrete deliveries rose by 89.7% to 9.96Mm³, of which Hanson contributed 4.4Mm³.  
 
The European region, which includes much of Central Asia in HeidelbergCement parlance, contributed a turnover 74.6% higher at
EUR1,576m and an EBITDA that jumped by 99.5% to EUR212m.  Sales of cementitous materials rose by 12.2% to 8.94Mt.  The strongest growth was seen in Eastern Europe, except for Poland and Hungary, with continued good growth in the Nordic area and the Benelux.  Shipments from the German plants were slightly higher, thanks to higher exports, while in Great Britain cement volumes were lower. Thanks to Hanson, aggregates volumes jumped by 151.7% to 27.61Mt, but were still up by one-third, excluding the Hanson effect.  The strongest underlying growth came from Eastern Europe, Germany and the Benelux. Ready-mixed concrete deliveries doubled (+104.4%), with a growth rate of 19.5% achieved by the non-Hanson operations, to 5.46m m³.  Asphalt deliveries were stable, while building products turned over EUR172m, largely from Hanson’s concrete products and brick operations.   
 
North American turnover rose by 64.8% to
EUR813m, thanks to Hanson, but, because of the first quarter seasonal loss of Hanson North America, accentuated by the deteriorating US market, the EBITDA dropped by 53.3% to €36m.  Sales of cementitous materials were boosted by the addition of Hanson and rose by 1.7% to 3.04m tonnes, but underlying cement sales were down by 9.6% and imports were cut back sharply.  Cement demand fell particularly strongly in Florida and in Southern California, while it continued to grow in western Canada. As a result of the inclusion of Hanson, aggregates shipments jumped by 352.9% to 24.74Mt.  The impact on ready-mixed concrete deliveries was much less marked, but these still improved by 4.3% to 2.15Mm³ in a falling market.  In building products, Hanson’s brick and roof tile operations were particularly badly hit.