Holcim reported a mixed performance in 2013 as attributable profit doubled while turnover declined. Overall volumes were down due to weaknesses in key emerging markets, but European shipments were finally on the up.
For the full year Holcim’s turnover declined by 6.8 per cent to CHF19,719m (US$22,349m). Operating EBITDA edged ahead by 0.2 per cent to CHF3896m, though ignoring last year’s restructuring there was a 5.6 per cent reduction. Trading profit rose by 34.8 per cent to CHF2357m but was off by 5.1 per cent if excluding exceptional items. Net attributable profit, however, did jump by 108.4 per cent to CHF1272m due to saving measures, while restructuring costs in 2012 lowered the comparison base.
Group cement deliveries fell 2.4 per cent to 138.9Mt hampered by a growth slowdown in markets such as India, Mexico and Brazil, as well as a subdued economic situation and political uncertainty in Africa Middle East. North America further burdened volume growth.
Asia-Pacific?In its Asia-Pacific division, Holcim experienced falls in some key markets and cement deliveries were down by 3.6 per cent to 70.3Mt. In Australia shipments dropped as a result of the Cement Australia going from being a subsidiary to a 50:50 joint venture with HeidelbergCement. ??Volumes declined in Sri Lanka (-11.5 per cent), New Zealand (-4.8 per cent), Vietnam (-3.2 per cent), India (-1.5 per cent) and by smaller percentages elsewhere. Of the two major Indian cement producers, ACC almost matched the previous year’s volume, but Ambuja Cements was slightly lower as India’s construction demand remained muted through 2013.
However, cement shipments rose by 11.2 per cent in Malaysia, 1.3 per cent in Bangladesh and by 0.7 per cent in the Philippines. Volumes in the Philippines had been substantially ahead until the November typhoon damage which brought activities to a near-halt for the remainder of the year.
Latin America?In Latin America, volumes edged ahead by 0.1 per cent to 25Mt, but Holcim’s biggest regional market of Mexico saw volumes down by 8.7 per cent as important infrastructure projects were postponed and private housing demand contracted. In Brazil, cement volumes came off by 4.6 per cent although prices improved by 2.2 per cent. On the other hand, advances were recorded in Costa Rica (+18 per cent), Ecuador (+8.9 per cent) and El Salvador (+5.1 per cent).
Despite a lack of sustained stimuli in construction markets, Europe was the only Holcim group region to see a slight improvement in sales volumes, recovering by 1.5 per cent to 26.7Mt. Bulgaria, which had been the weakest market in 2012, showed the strongest performance, rising by 16.9 per cent, followed by Azerbaijan (13.7 per cent), Russia (12 per cent), Slovakia (8.8 per cent) and Croatia (4.1 per cent). Switzerland saw a modest 0.6 per cent advance in volume terms, but prices were weaker. Holcim’s other European markets were all lower with Serbia (-16.6 per cent) and Italy (-12.7 per cent) faring the worst.
An unusually wet spring and early summer postponed concrete projects in the 1Q13. While this shortened construction season affected Holcim US, part of the backlog was recuperated during 2Q13. Cement volumes declined by 1.7 per cent in the USA and 7.8 per cent Canada, with prices increasing by an average 5.8 per cent and four per cent, respectively.
Africa and Middle East cement shipments were off by 5.2 per cent to 7.9Mt. Holcim Maroc, the largest contributor, saw lower prices in the three main products, but some improvement was noted. Holcim Lebanon saw increased demand from areas outside Beirut. There were higher cement deliveries in Qatar, but otherwise the grinding centres in Africa and the Persian Gulf had to cope with lower volumes, notably in the case of Guinea, which saw another double-digit drop in volumes.
On its outlook, the group expects cement volumes to increase in all regions this year, without providing any figures. Growth in the important Asia-Pacific region is seen slowing as uncertainties hang over the Indian and Vietnamese markets, demand in Australia is likely to remain subdued. Malaysia and Philippines have been highlighted as particular bright spots and overall higher group region deliveries are anticipated compared to 2013.
Latin American cement volumes are likely to remain stable, according to Holcim forecasts, but the group cautions that Mexico could face continued uncertainties. Brazil will also need more time to return to previous demand levels, it adds.
While Holcim expects European sales to advance this year, growth will mainly be driven by higher demand in Azerbaijan and the UK. North American markets are forecast to continue to benefit from a further recovery, especially in the US. In Canada, construction activity is projected to see relatively flat to moderate growth in most provinces where Holcim is active.
Africa/Middle East should see gradual improvements, but the market situation in Morocco remains difficult. Meanwhile, competition in West Africa is increasing, but Lebanon should remain stable. Domestic volumes are expected to be slightly below 2013 but should be compensated with exports.