North America leads profit improvement at Holcim

North America leads profit improvement at Holcim
Published: 26 August 2005

Holcim’s turnover in the first half of the year rose by 24.6 per cent to SwFr.7,870m (€5,077m) and the operating profit at the EBITDA level improved by 18.4 per cent to SwFr.2,037m (€1,314m), as the negative weather effect in the first quarter was worked away. As a result of acquisitions, net interest payments rose by 39.4 per cent to SwFr.354m (€228m).  However, the net attributable profit still rose by 82.6 per cent to SwFr.650m (€419m).  The decline in the EBITDA margin from 27.2 per cent to 25.9 per cent basically reflects the increased involvement in downstream activities and, ignoring this effect there was a slight underlying improvement to 27.4 per cent.  Aggregate Industries and Ambuja Cement Eastern were both consolidated from the beginning of April and this was a major factor in the net debt jumping by 109.8 per cent to The recently acquired Aggregate Industries and The Associated Cement Companies were not included in the volume and profit numbers, with consolidation only taking place at the end of the period.  As a result of consolidation, net debt rose by 109.8 per cent to SwFr.14,365m (€9,267m) to give a gearing level of 119.2 per cent .
 
Cement and clinker shipments in the period rose by 6.5 per cent to 52.5m tonnes, while the additional 20m tonnes of aggregates and 2m m³ of ready-mixed concrete made by Aggregate Industries in the second quarter helped push group ready-mixed concrete deliveries were 24.6 per cent ahead to 17.2m m³ and aggregates shipments up by 40.5 per cent to 68.3m tonnes.
 
Overall European cement deliveries were marginally lower at 14.9m tonnes as lower shipments in Germany, northern Italy and Belgium could not be fully compensated for by higher volumes elsewhere, notably in Romania, Bulgaria, France and Switzerland. Spain was again the largest contributor to profits.  Helped by an additional 7.3m tonnes from Aggregate Industries, aggregates shipments advanced by 26.2 per cent to 35.6m tonnes and ready-mixed concrete deliveries emerged 1.5m m³ higher at 8.1m m³, with 0.7m m³ coming from the new British subsidiary.  Turnover across Europe increased by 30.9 per cent to SwFr.3,066m (€1,978m) and the EBITDA improved by 20.2 per cent to SwFr.738m (€476m). 
 
North America provided the strongest increase, with a 47.8 per cent advance in EBITDA to SwFr.306m (€197m) on a turnover 56.3 per cent higher at SwFr.1,700m (€1,097m).  Because of delivery bottle necks in the north-eastern United States, cement deliveries were only marginally higher at 8.0m tonnes, though shipments elsewhere in the USA and in Canada were ahead, as were prices and the level of imports.  The inclusion of Aggregate Industries, which supplied 12.7m tonnes of aggregates and 1.3m m³ of ready-mixed concrete, boosted the downstream volumes in aggregates by 158.8 per cent to 20.7m tonnes and ready-mixed concrete deliveries by 109.1 per cent to 2.3m m³.
 
Latin America was the only region to report reduced profits, with the EBITDA declining by 2.8 per cent to SwFr.546m (€352m) on a turnover 3.1 per cent higher at SwFr.1,464m (€944m). Declining prices in Brazil and Colombia in combination with the inability to fully pass on higher energy costs and unfavourable exchange rate movements were behind reduction in profits from what has traditionally been Holcim’s most profitable area of operation. Cement and clinker shipments, however, were some 15 per cent higher at 11.4m tonnes.  Holcim Apasco in Mexico increased both domestic deliveries and export shipments and there was the initial consolidation of Cemento de El Salvador as well as higher volumes at Holcim Costa Rica and good increases in cement deliveries by group companies in Ecuador, Venezuela, Brazil, Argentina and Chile.  Ready-mixed concrete volumes across the region rose by 0.2m m³ to 4.1m m³, but aggregates shipments were 0.2m tonnes lower at 5.8m tonnes.