HeidelbergCement’s 3Q profit drops 25%, to cut costs

HeidelbergCement’s 3Q profit drops 25%, to cut costs
05 November 2008

HeidelbergCement’s third-quarter pre-tax profit fell 25 per cent, it reported on Wednesday, and said it was launching a new cost-cutting campaign in the face of volatile energy costs and an economic slowdown which could hurt earnings.

The world’s fourth-largest cement maker said pre-tax profit in the three months fell to EUR513m (US$658.8m). But revenue rose 25 per cent to EUR3.9bn, boosted by the integration of Hanson, which it bought for EUR14bn in 2007. The company, majority controlled by German billionaire Adolf Merckle, said it had suffered a considerable slide in sales in the United States and Britain as the financial market crisis and the weak economic environment slowed construction activity.

"For the whole of 2008, we expect a noticeable improvement in group turnover despite the significant decline in the US and United Kingdom," Chief Executive Bernd Scheifele said in a statement.

 The firm had said in August it anticipated a significant double-digit percentage increase in turnover and earnings for the whole of 2008. "As a result of the increasingly deteriorating market situation, we have decided to introduce further cost-saving measures that will take effect immediately, in addition to the "Fitness 2009" programme with annual savings of EUR250m," said Scheifele.
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