Holcim's profits hurt by the strength of the Swiss currency

Holcim's profits hurt by the strength of the Swiss currency
Published: 30 July 2015

Tagged Under: business results Holcim 

Holcim's cement deliveries declined by two per cent to 67.6Mt in the first six months, and the underlying advance was 2.1 per cent. Shipments of aggregates rose by 3.4 per cent to 72Mt and ready-mixed concrete deliveries improved by 0.6 per cent to 18.2Mm³ but declined by three per cent on an underlying basis, while asphalt sales rose by 13.8 per cent to 4.6Mt.

Turnover declined by 3.4 per cent to CHF8646m, but rose by 11.9 per cent in euro terms to EUR8182m, while on a comparative basis there was a 0.2 per cent reduction. Running EBITDA was 3.7 per cent lower at CHF1557m (EUR1473m, +11.3 per cent). The trading profit came off by 12.3 per cent to CHF827m (EUR782m), while the net attributable profit did rise by 18 per cent to CHF573m (EUR542m). Net debt at the end of June was 13.5 per cent lower than a year earlier at CHF9057m (EUR8571m) to give a gearing of 49.8 per cent, compared with 56.1 per cent a year earlier. Capital investment in the six months jumped from CHF739m to CHF1737 (EUR1644m), with maintenance capital expenditure amounting to CHF732m (EUR693m).

The Asia Pacific area turnover declined by 3.4 per cent to CHF3234m (EUR3060m), or 37.4 per cent of the group total and EBITDA was off by seven per cent to CHF600m (EUR568m). Cement deliveries fell by 2.3 per cent to 35.2Mt, with New Zealand improving by 3.4 per cent, while there was a 2.3 per cent decline in Asia. Volume improvements were seen in Sri Lanka (+17.9 per cent), Vietnam (+12.8 per cent), Malaysia (+9.8 per cent) and the Philippines (+5.8 per cent), but dropped in Bangladesh (-10.1 per cent) and India (-5.0 per cent). Prices advanced modestly in Vietnam and The Philippines, but eased in Bangladesh, Malaysia, Sri Lanka and India. In India, by far the largest market, volumes decreased by 6.3 per cent at ACC to 12.02Mt, but in ready-mixed concrete both volumes and profitability improved, while at Ambuja Cement volumes came off by 3.8 per cent to 11.23Mt. Aggregates shipments declined by 9.7 per cent to 11.3Mt while ready-mixed concrete deliveries were ahead by 0.7 per cent to 5.2Mm³.

In the European region, turnover declined by 7.5 per cent to CHF2514m, but in euro terms there was a 6.9 per cent increase to EUR2379m. EBITDA came off by 12.9 per cent to CHF355m, which becomes EUR336m, or a 0.5 per cent improvement. Cement shipments declined by 6.4 per cent to 11.9Mt, but the aggregates tonnage rose by 14.4 per cent to 39.7Mt and ready-mixed concrete by 13.7 per cent to 6.7Mm³ and asphalt sales jumped by 21.3 per cent to 3.2Mt. Domestic cement deliveries jumped by 46.6 per cent in Germany thanks to the acquisition from Cemex, but at the underlying level there was a 7.8 per cent reduction. The deal with Cemex also let to a 23.5 per cent volume reduction in Spain, though there was a 25.4 per cent underlying improvement there. Elsewhere, there were increases of 23.1 per cent in Romania, of 21.4 per cent in Slovakia, of 13.7 per cent in Croatia, of 9.5 per cent in Bulgaria and of three per cent in Serbia. On the other hand, domestic deliveries fell by 26.7 per cent in Azerbaijan, 22.4 per cent in France, 16.2 per cent in Italy, 15.5 per cent in Russia, 12.9 per cent in Switzerland, 4.2 per cent in Belgium and 0.9 per cent in Hungary. The lower average price in Westphalia brought down the German overage selling price by 11.8 per cent, with mid- to high-single figure declines being seen in Azerbaijan, Croatia, Italy, Slovakia, Serbia and Switzerland.   

Latin American turnover declined by 1.8 per cent to CHF1438m (EUR1361m) but EBITDA showed a 5.8 per cent recovery to CHF434m (EUR411m). Cement deliveries were unchanged overall at 12.1Mt, but the aggregates volume dropped by a further 39.3 per cent to 2.4Mt and ready-mixed concrete deliveries were off by 3.2 per cent to 3.2Mm³. Cement volumes increased by 14 per cent in Mexico. They were also ahead in Colombia and El Salvador by 9.8 and7.9 per cent, respectively. Elsewhere they were mainly lower, with reductions of 13 per cent in Ecuador and 6.6 per cent in Brazil. Prices were mostly higher, but did decline in Brazil (-2.4 per cent) and Colombia (-0.2 per cent). Aggregates deliveries fell notably in Mexico and Brazil, with prices decreasing by 5.1 per cent in Brazil but being well ahead in Mexico.

Holcim's North American turnover improved by 7.4 per cent to CHF1374m (EUR1300m) and EBITDA advanced by 17.2 per cent to CHF181m (EUR171m). Cement deliveries increased by 2.7 per cent to 5.6Mt, but the 3.6 per cent growth seen in the USA was somewhat reduced by the 1.8 per cent volume reduction in Canada. Cement prices improved by an average eight per cent in the United States, but were one per cent lower in Canada. North American aggregates volumes improved by 2.5 per cent to 17.8Mt, with Canadian volumes improving by 0.8 per cent and the average price by 0.2 per cent. The US aggregates volume rose by 3.4 per cent and the average price advanced by 9.2 per cent. Ready-mixed concrete deliveries were 13.9 per cent lower at 2.8Mm³ and asphalt volumes declined by 2.7 per cent to 1.4Mt.

In Africa and the Middle East, turnover declined by a further 14.8 per cent to CHF373m (EUR353m) and EBITDA came off by 20.2 per cent to CHF109m (EUR103m). Cement shipments were down by 7.4 per cent to 4Mt and sales of aggregates declined by 28 per cent to 0.7Mt while deliveries of ready-mixed concrete dropped by 39.2 per cent to 0.3Mm³. Morocco remains by far the most important market in this division and volumes are helped by the supply of clinker to Côte d’Ivoire. Cement volume in Côte d’Ivoire declined by two per cent, but improved by 3.9 per cent in Réunion and 2.7 per cent in Guinea.