HeidelbergCement EBITDA improves
In 2004, HeidelbergCement managed to increase the operating profit at the EBITDA level by 19.0% to €1,219.3m on a turnover 8.8% higher at €6,929.4m. Although the net interest charge was 10.1% higher at €229.6m, the running profit before tax was 25.0% higher at €589.2m, but exceptional impairment charges, provisions and exchange losses led to a pre-tax loss of €151.7m as the new top management, brought in from outside, re-assessed the value of the assets. Capital investment amounted to €451.0m, an increase of 19.6%, but spending of acquisitions fell from €225.9m in 2003 to €44.7m last year and consisted mainly of increasing the stakes in Anneliese Zementwerke and China Century Cement. Year-end net debt was 1.8% higher at €3,668m but a reduction in the equity base led to an increase in the gearing level from 86.1% to 92.6%.
The German EBITDA rose by 141.1% to €110m, of which the newly consolidated Bosenberg works contributed around €3m, as prices began to recover and the cost base was lowered to take account of the lower levels of demand, while at the trading level there was a swing from a €42m loss to a profit of €43m. A 7.4% increase in area turnover to 846m reflected an increased scope of consolidation, including aggregates, as well as higher cement prices, though underlying cement volumes fell by 12.9% as HeidelbergCement sacrificed market share to lead prices forward in a number of regions.
A 7.4% fall in the western European EBITDA to €164m on at turnover 3.2% lower at €929m and reflected the pressure from German cement imports on the Belgian and Dutch markets as well as lower demand in The Netherlands and some costs relating to the new kiln at Padeswood in north Wales in a broadly stable British market.
The kiln reconstruction and associated down time at the Brevik plant in Norway was the main reason behind an 11.5% decline in the EBITDA to €89m and a 5.5% reduction in turnover to €716m, but the sale of non-core operations also played a part as did a fire at the Russian cement plant. Domestic deliveries of cement in rose by 16% in Norway and by 7% in Sweden rose by 10.7%, while in Estonia and the St. Petersburg area of Russia increases ran at 18.5% and 34% respectively. As a result cement exports from the Nordic area dropped by 19.8% to less than 1.8Mt.
Although the Bulgarian business was sold, eastern European EBITDA advanced by 12.6% to €190m on a turnover 4.8% higher at €657m, while cement deliveries were up by an underlying 9.4% to 9.80m tonnes. Deliveries rose by 20% in Romania, 11% in Poland and 10% in the Ukraine, but were lower in respect of Hungary and Bosnia-Hercegovina.
The North American EBITDA rose by some 14% in dollar terms, but on conversion the increase was restricted to 4.4% to €326m on a turnover that rose by 10.3% to US$2,112m, which translates into a 0.8% advance to €1,699m. Record volumes of 13.4Mt were achieved in North America, with shipments in the western parts of the United States and Canada rising by some 11% compared with increases of around 6% on the Atlantic and Gulf coasts. Although volumes in the Canadian Prairies were off by 2% total Canadian cement shipments for the group reached 2.1Mt.
Although Indocement’s EBITDA was 10.1% lower at €118m on a turnover off by 3.3% at €413m, its first time contribution helped boost the EBITDA from the Asian and African operations by 167.6% to €192m as the turnover advanced by 104.8% to €1,007m. However, the kiln utilisation rate improved from 66% to 75% as volumes rose by13%. Turkey did substantially better thanks to higher prices and some reduction in costs. Good volume growth was seen in Africa, with the exception of Ghana, where there was a slight decline.
