HeidelbergCement sees growth in Eastern Europe and overseas

HeidelbergCement sees growth in Eastern Europe and overseas
Published: 05 May 2005

In first quarter of 2005, HeidelbergCement’s turnover rose by 0.6 per cent to €1355m, but the EBITDA declined by 5.4 per cent to €85m as unfavourable weather across large parts of Europe in March and a volume loss of some six per cent as a result of Easter falling into the period this year.  Group cement and clinker volumes declined by 2.2 per cent to 12.66Mt, though deliveries were ahead in Northern Europe and overseas.   Helped by a lower interest charge, the seasonal running loss before tax fell from  €101m to €78m. The rights issue helped to reduce net debt by 12.0 per cent to €3,731m and the gearing level came down from 93.4 per cent to 85.8 per cent.  For the full year, HeidelbergCement is expecting growth to come in the main from Eastern Europe, North America and Indonesia.
 
In Germany, the further decline in construction activity and heavy snow in March combined to reduce cement deliveries by 26.0 per cent to 0.96Mt.  However, the recovery in cement prices continued and the reduction in turnover was limited to 15.7 per cent to €121m, but the seasonal loss at the EBITDA level rose by 92.8 per cent to €19m.  The Cartel Office cleared the acquisition of Teutonia Zementwerk towards the end of April and this company will be consolidated during the second quarter.
 
Turnover in Eastern Europe rose by 10.7 per cent to €92m, helped by a stronger zloty, but the EBITDA turned marginally negative with a €1m loss.  In spite of a 23 per cent increase in cement deliveries in the Ukraine, overall shipments across the region declined by 4.2 per cent to 1.21Mt.  In a deal with Schwenk, HeidelbergCement has taken management control of Duna-Dráva in Hungary by increasing its stake to just above 50 per cent.  Continued rationalisation led to reductions in the work forces in the Ukraine, Poland and the Czech Republic.