Holcim FY results in-line, bullish for 2005

Holcim FY results in-line, bullish for 2005
Published: 02 March 2005

Holcim Ltd posted a 33.2 perc ent rise in 2004 net profit, in line with market consensus, raised its dividend by Swf0.10 to Swf1.25 per share and forecast further improvements in results this year.  In most countries, the Swiss group expects the continuing ’robust’ state of the construction sector to support the existing high level of demand for cement, aggregates and concrete going forward. 

’Given that Holcim will be taking further steps to increase efficiency in the group, the board of directors and the executive committee are expecting to see an improvement in results in the current financial year too,’ it said.  Net profit in 2004 was Swf914m in line with analysts’ forecasts of Swf816-933m. Operating profit rose 16.9 per cent to Swf2.251bn compared to forecasts of Swf2.141-2.583bn. 

Cement and clinker deliveries rose to 102.1Mt from 94.3Mt ,aggregates sales were lifted to 104.2Mt from 95.9Mt and ready-mix concrete volumes increased to 29.3Mm3 from 27.0Mm3

In Europe, construction activity was on the increase in most countries, enabling Holcim to increase cement deliveries 16.2 per cent to 30.8Mt and enabling nearly every division in the region to improve operating results, in some cases substantially. Operating income in Europe rose 37.3 per cent to Sfr662m

The upswing in North America continued, and the US cement industry was operating at full capacity, allowing Holcim to increase regional cement sales 1.7 per cent to 17.5Mt while focusing on key accounts and the higher price segment. Operating profit rose 19.0 per cent to Swf325m. The group indicated it was prioritising business in North America because it was operating at "capacity limits" there. 

Currency effects hit Holcim’s Latin American operations despite growth accelerating in most markets. Operating income fell 5.6 per cent to Swf723m but in local currency terms was up 2.3 per cent. Cement deliveries rose 6.7 per cent to 20.6Mt 

In the Africa/Middle East region cement deliveries rose 9.4 per cent to 14.0Mt and operating profit rose 28.9 per cent to Swf370m. In Asia-Pacific cement sales rose 11.2 per cent to 25.8Mt and operating profit was up 10.6 per cent at Swf219m.

"In most countries the continuing robust state of the construction sector will support the existing high level of demand for cement, aggregates and concrete," it predicted.