Holcim comfortably ahead after nine months

Holcim comfortably ahead after nine months
08 November 2004

Holcim increased turnover by 6.6% to Sw.Fr.10,017m (€6,463m) in the first nine months of 2004, an increase of 6.6%.  The operating profit at the EBITDA level advanced by 15.3% to Sw.Fr.2,792m (€1,801m).  In constant currency, these increases amounted to 8.8% and 13.1% respectively.  The trading profit was up by 15.3% at Sw.Fr.1,787m (€1,153m).  The cement and clinker volume for the period amounted to 77.3m tonnes, an increase of 9.6%, of which 5.0% represented organic growth and the remaining 4.6% from scope changes, most notably the consolidation of the Russian business.  Volume growth was higher in the downstream operations, with an increase of 11.2% in ready-mixed concrete and one of 13.9% in aggregates.9.6%.   Net debt at the end of September was 15.5% lower than at the same time last year, with the gearing level falling from 94.3% to 70.9%.  

In Europe cement volume was up by 2.5% at the underlying level tom 23.6m tonnes, with the main areas of growth being Romania, Bulgaria, Spain and Italy, with France and Switzerland also doing better.  Some of the markets closer to Germany suffered the impact of imports from Germany, though this is now lessening as prices in the German market gradually improve.  Holcim has announced further price increases in Germany for new contracts starting from next January, while prices currently being around €42 per tonne at the ex. works level. Turnover across Europe was 8.6% higher at Sw.Fr.3,631m (€2,343m), which represents an underlying advance of 4.9%, while the trading profit rose by 20.7% to Sw.Fr.577m (€372m).  The newly consolidated Alpha Cement in Russia had the benefit of a building boom in the greater Moscow area and higher inter-group exports.  New kiln lines were commissioned in Slovakia and in Romania and a slag grinding plant is being commissioned at Dunkirk in northern France next year

The Latin American cement volume rose by 7.7% to 15.4m tonnes, but negative exchange rate effects restricted turnover growth to just 1.9% to Sw.Fr.2,177m (€1,405m) and the trading profit actually declined by 5.7% to Sw.Fr.559m (€361m), with the result that Latin America lost its long-standing position as the largest profit earner in the group to Europe.  Electricity costs have risen sharply in a number of countries, particularly where gas is used generate electricity.  A strong recovery in domestic demand was seen in Argentina, Venezuela and Ecuador and a more positive trend is now discernible in both Chile and in Brazil.  While cement shipments in Mexico were down by around 2%, ready-mixed concrete deliveries rose by around a fifth.  A new kiln was started up in Costa Rica during October. 

In North America, all the necessary planning permissions have now been obtained for the new Sainte Geneviève cement works on the Mississippi and work on this plant, which will have the largest cement kiln outside Asia, should commence during 2005.  North American cement deliveries rose by 4.8% to 13.2m tonnes, with turnover 4.8% up at Sw.Fr.1,932m (€1,246m) and trading profit advancing by 35.2% to Sw.Fr.242m (€156m).  Local cement shortages continue in the United States and Holcim expects to import around 2m tonnes of cement, clinker and slag this year.  Prices to date are around US$3 per short ton higher in the year to date, with price increases ranging from US$6 to US$9 have been announced for next year, with these coming into effect in January or April, depending on the area.

The Asia Pacific area saw cement deliveries rise by 8.5% to 19.1m tonnes and the turnover rose by 11.5% to Sw.Fr.1,459m (€941m), with the trading profit increasing by 23.8% to Sw.Fr.187m (€121m).  Cement shipments rose in all countries except for Bangladesh, with the most notable increases being seen in Thailand, the Philippines and Vietnam.  The new 1.3m tonnes per annum grinding station at Thi Val in southern Vietnam has just been commissioned.  The clinker is coming from Thailand, where previously mothballed kilns have been re-activated. 

The African and Middle East region showed the strongest volume growth with cement deliveries rising by 11.6% to 10.6m tonnes and turnover advancing by 11.5% to Sw.Fr.1,141m (€736m). The trading profit improved by 23.8% to Sw.Fr.269m (€174m).  South Africa and Morocco showed the strongest growth in domestic demand, while volumes in the Lebanon and in Egypt were supported by exports.  Profits moved ahead in all countries except for Morocco, where the impact of the new cement tax could not be passed on.

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