HeidelbergCement’s pre-tax profit grows by 86.4%

HeidelbergCement’s pre-tax profit grows by 86.4%
Published: 23 March 2007

Helped by acquisitions and favourable markets, HeidelbergCement boosted turnover by 18.3% to EUR9,233.8m in 2006.  The EBITDA improved by 31.1% to EUR1,974.5m, leading to a 44.6% increase in the trading profit to EUR1,460.2m.  A lower interest charge, as the net debt fell by 13.1% to EUR3,081m, helped to produce an 86.4% advance in the pre-tax profit to EUR1,438.7m.  New subsidiaries in Kazakhstan, the Ukraine and Denmark were consolidated for the first time.  The year-end gearing level dropped from 70.1% in 2005 to 52.5% in 2006.  Group cement deliveries increased by 16.7% to 79.71Mt, with ready-mixed concrete shipments rising by 10.1% to 31.10Mm³ and sales of aggregates advancing by 13.7% to 103.97Mt.  The use of alternative kiln fuels has, to date, been developed mainly in Europe, where its share rose from 31.9% to 34.4%, compared with 9.2% in North America and just 1.5% in the rest of the world.
 
Europe, to which has been added other parts of the former Soviet Empire, produced 19.0% more clinker, and cement production moved ahead by 20.0% to 39.82Mt. Ready-mixed concrete deliveries were 15.4% higher at 19.91Mm³ and the aggregates volume advanced by 20.8% to 75.08Mt.  German construction activity has now begun to improve, particularly in the southern provinces of Baden-Württemberg and Bavaria, where HeidelbergCement has traditionally held strong positions, and the group’s German cement shipments rose by 11.4% to 8.51Mt.  The German ready-mixed concrete operations were further rationalised and some 40 batching plants, which could not be efficiently served by group cement plants, were sold or closed down.  Good volume growth were also achieved in northern Europe and in The Netherlands, reaching double digits in Estonia and Sweden, but the strongest growth rates were achieved in eastern Europe, with the growth in cement and ready-mixed concrete in Poland and cement in Romania being particularly notable. Shortages in capacity restricted cement deliveries in Estonia, Russia and the Ukraine as well as concrete shipments in parts of Poland. Turnover rose by 22.7% to
EUR4,230m and the trading profit improved by 68.2% to EUR648m.