Holcim is expected to report on Wednesday a strong fourth-quarter net profit of SwFr414m, supported by exceptionally good weather conditions and improved pricing power, analysts said.
Analysts polled by AFX News forecast net profit of SwFr350-468m, or SwFr414mon average, up from SwFr365m last year.
EBIT is seen reaching SwFr852m-1.017bn or SwFr929m on average, up from SwFr740m while sales are expected to come in at SwFr5.950-6.257bn, or SwFr6.128bn on average, up from SwFr5.043bn in the same period last year.
Focus is expected to be on the Swiss cement maker’s outlook for 2007 and expected margin improvement of subsidiary Aggregate Industries, analysts said.
’The fourth quarter should have been strong, given the good weather conditions in Europe and North America,’ Kepler analyst Josep Pujal said, adding that the consolidation of the company’s Indian activities should be a big contributor to external growth.
’As the extremely mild winter should have supported business throughout the fourth quarter in the Northern Hemisphere, there is a fair chance that Holcim could beat our and consensus estimates,’ Vontobel analyst Remo Rosenau said.
The bank is also expecting improvements in pricing power in Aggregates owing to the strong wave of consolidation which started two years ago.
Rating the stock a ’market outperform’, Vontobel forecasts net profit to reach SwFr350m, EBIT to total SwFr852m and sales to come in at SwFr5.950bn.
Looking ahead, a BNP Paribas analyst said he expects Holcim to give an ’overall positive outlook for 2007’.
However, he added that he does not expect industry’s guidance for future growth to be overly optimistic and rates the stock a ’neutral’.
Meanwhile, Deutsche Bank analyst Imran Akram considers ’2007 to be another strong year for cement’, with Holcim ’strategically well placed to gain from the solid growth in emerging markets’.
Among other fourth-quarter forecasts, Sal Oppenheim sees net profit at SwFr435m, EBIT at SwFr919m and sales of SwFr6.176bn.
Exane BNP forecasts net profit of SwFr468m, EBIT of SwFr1.017bn and sales of SwFr6.257bn.