Holcim half year data and analysis

Holcim half year data and analysis
Published: 25 August 2006

In the first half of 2006, Holcim increased its cement volumes by 24.8% to 65.5Mt, with ready-mixed concrete deliveries rising by 20.3% to 20.7m m³ and aggregates shipments advancing by 23.9% to 84.6Mt.  Holcim’s turnover improved by 38.2% to SFr10,879m (€6,974m) and the EBITDA advanced by 33.4% to SFr2,717m (€1,742m), which, when measured in local currencies, represents an increase of 28.5%.  Net debt at the end of June stood at SFr12,240m (€7,796m), which represents a reduction of 3.6% compared with a year earlier.
The European turnover advanced by 29.8% to SFr3,960m (€2,540) with the EBITDA rising by 20.6%, or by 10.3% at the underlying level, to SFr890m (€571m).  Cement shipments across Europe were 3.4% higher at 15.4Mt, with the full period’s contribution from Aggregate Industries boosting downstream operations, where aggregates shipments rose by 24.4% to 44.3Mt and ready-mixed concrete deliveries by 18.5% to 9.6m m³. Strong improvements in profitability came from France, Spain, Russia, Bulgaria, Croatia, Romania and Serbia, but volumes were ahead in virtually all markets.  Good performances were also achieved in the Benelux countries and in Switzerland.  After a prolonged period of weakness, even the main German subsidiary managed to push volumes ahead slightly.  Assuming clearance by the British authorities, Foster Yeoman should begin to contribute in the second half.
Higher North American prices helped to boost turnover by 39.8% to SFr2,376m (€1,523m) and the EBITDA advanced by 22.9% to SFr376m (€241m).  Cement shipments rose by 8.8% to 8.7Mt, with both domestic production and imports increasing, while the aggregates tonnage rose by 31.4% to 27.2Mt and ready-mixed concrete deliveries were 26.1% ahead at 2.9m m³.  Overall US construction demand has continued to increase in spite of weaker housebuilding activity, while in Canada demand has improved across the board.  A second price increase of US$5.50 was introduced in most US markets in July and further increases of US$11 to US$12 are planned for next January.   
Latin American turnover rose by 24.0% to SFr1,816m (€1,164m) with the EBITDA advancing by 18.3% to SFr646m (€414m) as cement shipments improved by 13.2% to 12.9Mt, with ready-mixed concrete volumes rising by 19.5% to 4.9m m³ and aggregates by 8.6% to 6.3Mt.  The Brazilian price war led to a slight loss being incurred even at the EBITDA level though volumes rose by some 11%.  Holcim Apasco in Mexico improved across all areas, including clinker and cement exports.  Across much of Latin America, higher commodities prices have boosted cement demand, while in Argentina cement production has risen to its highest level for six years though margins were with by fuel costs.
The Asia Pacific businesses contributed a turnover 90.3% higher at SFr2,080m (€1,333m) and the EBITDA jumped 118.8% to SFr582m (€373m), with cement deliveries moving ahead by 66.4% to 24.3Mt.  Ready-mixed concrete shipments were 23.5% ahead at 2.1m m³ but aggregates shipments were 12.5% lower at 1.4Mt.  The sharply increased cement shipments reflect the initial consolidation of the Indian operations, while Huaxin Cement in China is not yet consolidated.  At the underlying level, the Indian companies all increased volumes at good rates.  Indonesian turnover suffered as a weak domestic market let to more volume being exported, while lower shipments in Vietnam still boosted profits as the group concentrated on higher value products. Shipments in Australia and New Zealand were somewhat lower.  Lower Thai domestic deliveries were almost entirely offset by increased export shipments to Bangladesh, Vietnam and the USA.    
Africa and the Middle East saw turnover rise by 17.0% to SFr1,005m (€644m) with the EBITDA advancing by 10.2% to SFr322m (€206m).  Cement shipments were just 1.4% higher at 7.3Mt, but downstream volumes grew faster with ready-mixed concrete up by 20.0% to 1.2m m³ and aggregates by 17.4% to 5.4Mt.  Good volume increases were seen in Morocco, Egypt, South Africa and the Indian Ocean area.  Lower cement volumes in the Lebanon were partially offset by exports to Syria and Iraq.  Holcim has reached an agreement in principle to sell 85% of its interest in Holcim South Africa to a Black Economic Empowerment Consortium, with completion scheduled to take place in 2007.