HeidelbergCement said it swung to a 2005 net profit of EUR415 million following a loss of EUR366 million the year before and will propose a dividend payment of EUR1.15 a share. Analysts had forecast 2005 net profit of EUR476.1 million, according to a Dow Jones Newswires poll of six analysts.
HeidelbergCement said results were hurt by a EUR117 million charge for restructuring costs and provisions for loss risks, as well as impairment of previously acquired goodwill and fixed assets. The company said 2005 earnings growth was mainly due to the continuing strength of the North American construction industry, where revenues rose by 26 per cent. A 3.1 per cent drop in revenue in western Europe is mainly due to pricing pressures, HeidelbergCement added.
The cement-maker forecasts a rise in revenues and net profit in 2006 as cost cutting measures take hold and efficiency improves. HeidelbergCement introduced a wide-ranging cost-cutting and restructuring program in 2005, dubbed "win", which aims to streamline company structures. The company sees European business improving on growing domestic demand in the Eurozone and rising exports while the economy of eastern Europe is also showing strong growth. On the other hand, high energy prices could weigh in 2006, the company added.