German building-materials group HeidelbergCement reported a 53 percent rise in third-quarter operating profit on Tuesday, following a pick-up in business in eastern Europe and higher cement prices. Operating profit rose to Euro 344m from Euro 225m a year earlier on a sales increase of 9.7 percent to Euro1.97bn. The results beat the average forecast of Euro 310m of 4 analysts polled by Reuters.
HeidelbergCement is reaping the benefits of cost cuts and restructuring as the German cement industry is recovering from a price war that crippled producers. The company which also controls Indonesia’s second-biggest cement maker, Indocement, said it expected growth in operating income and operating income before depreciation in double figures for 2004, as well as an improvement of at least 5 per cent in sales.
HeidelbergCement shares were up 0.7 percent to 42.29 euros by 0803 GMT. HeidelbergCement shares have risen about 27 percent since the start of the year, outperforming a 15 per cent rise in the German mid-cap index. Last week, Deutsche Bank upgraded HeidelbergCement to "buy" from "neutral" on expectations of a rally in cement prices.