Holcim New Zealand higher profit

Holcim New Zealand higher profit
Published: 05 April 2006

Holcim New Zealand reported a three per cent net profit increase and increased cement sales last year, despite rising energy costs and disruptions to shipping caused by a lengthy closure of the Buller River bar.  The company’s net profit was $26.4m, compared with NZ$25.6m the previous year.  Holcim NZ’s total sales increased eight per cent to NZ$307.4m in the year ended December 31, but the impact of increased costs was reflected in relatively small increase in earnings before interest and tax from $52.9m to NZ$53.4m.  Of concern were rising energy costs. Electricity rose 47 per cent from NZ$5.5m to NZ$8.1m and coal 17.5 per cent or NZ$1.4m higher at NZ$9.4m.
 
Holcim’s total cement total sales were 630,000t, the highest ever, reflecting the continuing increase in the country’s building activity.  Capital investment in 2005 at Westport increased significantly, with NZ$4.5m of new quarry equipment, a new loader and a late-model, second-hand loader, plus new dump and delivery trucks and cement trailers.  The company also spent NZ$2m upgrading the dust-capture systems at its Cape Foulwind kilns, near Westport. 
 
High demand and future projections for cement consumption, together with a capacity shortfall and aging plant have prompted Holcim NZ to explore its future cement manufacturing and distribution opportunities.  The cement plant, built almost 50 years ago, reportedly cannot keep up with demand.