Hanson’s profits hit by California and the dollar

Hanson’s profits hit by California and the dollar
Published: 20 February 2004

Hanson PLC, the global leader in aggregates, generated a turnover of €5,723.5m, a decline of 1.1 per cent entirely because of the weakness in the US dollar.  The operating profit at the EBITDA level emerged 7.1 per cent lower at €954.8m and the trading profit was down by 5.9 per cent at €673.7m and the running profit before tax fell by 8.7 per cent to €462.5m.  Capital expenditure rose by 45.4 per cent to €301.2m, while €221m was spent on acquisitions, the biggest of which was the US$152m purchase of Better Materials in the United States.

Hanson North America increased turnover in local currency terms by 7.3 per cent to US$2,623.4m but the trading profit fell by 14.6 per cent to US$369.4m, reflecting continued weakness in the California market, that reduced aggregates, ready-mixed concrete and cement profits in that state by US$31.1m, of which around US$5m can be attributed to the 4.1 per cent decline in average cement prices in northern California.  US profits were also hit by a US$39.1m increase in the pension charge and a US$11.2m reorganisation cost.  Against weaker markets also in the north east and parts of the Midwest, demand in Texas, Hanson’s biggest state, and Arizona was strong.  Aggregates deliveries across the United States rose by 8.7 per cent, or an underlying 2.2 per cent to 121Mt, with average prices up by 0.5 per cent.  While sales of cement and ready-mixed concrete were marginally lower, volumes in concrete products and bricks were up by 6.0 per cent and 1.7 per cent respectively.