HeidelbergCement shows strong recovery in Europe

HeidelbergCement shows strong recovery in Europe
08 May 2014


HeidelbergCement's first quarter turnover improved by 5.7 per cent to EUR2749.8m and the EBITDA improved by 15.7 per cent to EUR228.8m and the trading profit jumped from EUR9.3m to EUR50.4m.

The net interest charge increased by 3.1 per cent to EUR134.5m and the pre-tax loss was reduced by 36.6 per cent to EUR104.2m and the net attributable loss declined by 37.7 per cent to EUR146.5m. Capital investment in the period was increased by 79.1 per cent to EUR251.1m, while spending on acquisitions dropped by 98.5 per cent to EUR4.2m, as a deal like the one with Holcim to double its interest in Cement Australia did not occur again.

Capital expenditure for the full year should be around EUR1200m, half of which would be for expansion. Net debt at the end of March increased by 4.6 per cent to 7958m to give a gearing level of 64 per cent. The change in accounting rules now excludes Cement Australia, Akçansa, Duna-Drava and the Chinese and other joint ventures, with the first two being of particular importance.

Group cement and clinker shipments increased by 10 per cent to 17.48Mt. The international trading activities of HC Trading increased volumes by 29.5 per cent to 3.6Mta. Total trading turnover, which also includes fuel, rose by 39 per cent to EUR244m as deliveries of coal and petcoke advanced by 83.4 per cent to 1.4Mta. Aggregates shipments staged an 11.3 per cent recovery to 44.33Mt, while ready-mixed concrete deliveries advanced by 11.2 per cent to 7.71Mm³ and the asphalt volume rose by 28.2 per cent to 1.53Mta. 

The Western and Northern European turnover increased by 22.7 per cent to EUR914m and the EBITDA swung from a EUR31m loss back to a EUR36m profit. Turnover in cement advanced by 19.3 per cent to EUR382m and the EBITDA margin went from a negative 3.7 per cent to a positive 2.8 per cent. Cement and clinker deliveries rose by 19.9 per cent to 4.62Mta. The volume recovery was the strongest in Germany, with an increase in excess of 30 per cent and double-digit increases were also seen in Belgium, Northern Europe and Great Britain. Only in Sweden was there a decline. Aggregates shipments rose by 27.5 per cent to 13.89Mta and the turnover rose by 29.3 per cent to EUR178m, with the margin recovering from 3.2 per cent to 11.4 per cent. Ready-mixed concrete deliveries were 25.1 per cent higher at 2.72Mm³. Asphalt operations, which are mainly in Great Britain, staged a 53 per cent recovery to 0.69Mta. In building products turnover rose by 20.2 per cent to EUR111m as the margin jumped from 3.1 per cent to 12.7 per cent, helped notably by bricks. 

Eastern Europe and Central Asia reported an 18.4 per cent recovery in turnover to EUR194m, and the EBITDA loss was reduced by 48.9 per cent to EUR6m. Cement turnover recovered by 18.9 per cent to EUR167m and the EBITDA margin turned positive at 0.9 per cent as cement deliveries rose by 31.8 per cent to 2.82Mta. The volume recovery was strongest in Poland at around 90 per cent and rose in double-digits in all other countries except for Russia, where the advance was contained in single figures. A new 0.8Mta cement works in western Kazakhstan came on-stream in the period. In aggregates, volumes jumped by 40.7 per cent to 2.33Mta, but the turnover only advanced by 17.2 per cent to EUR12m. Ready-mixed concrete deliveries improved by 21.6 per cent to 0.45Mm³.

The Asia-Pacific turnover was negatively affected by exchange rate movements and declined by 11.6 per cent to EUR676m and the EBITDA came off by 15.3 per cent to 154m. In cement, the turnover came down by 13.8 per cent to EUR406m and the EBITDA margin declined from 31.7 to 29 per cent. Cement and clinker volumes were 3.3 per cent ahead at 6.31Mta. Indocement in Indonesia increased deliveries by just two per cent as heavy rainfall depressed volume growth. An additional 1.9Mta grinding capacity was commissioned during the quarter and a further 4.4Mta will come on-stream in 2015, with two 2.5Mta greenfield works being planned for 2017 completion. Helped by additional capacity coming on stream, Indian production increased by 28.6 per cent and the annual capacity now stands at 5.6Mta. The joint ventures in China and in Australia both saw increased cement demand. The business in Bangladesh saw a slight volume improvement, but pricing weakened. Aggregates turnover declined by 10.6 per cent to EUR115m, but the volume improved by 7.9 per cent to 8.56Mta, with slightly lower Malaysian tonnages being more than offset by higher volumes in Indonesia and Australia. Ready-mixed concrete deliveries improved by 2.3 per cent to 2.57Mm³ while asphalt sales rose by 24 per cent to 0.51Mta.

North American turnover declined by 3.2 per cent to EUR591m and the EBITDA emerged 47.2 per cent lower at EUR19m as the first two months suffered badly from the weather. The cement turnover was 6.8 per cent lower at EUR190m as the volume declined by 3.3 per cent to 2.17Mta and the EBITDA margin in cement fell from 10.7 per cent to 2.9 per cent. Cement deliveries rose in the west and in the south, but were lower elsewhere because of the harsh winter. Prices have been increased in all markets, mainly from April. Aggregates shipments eased by 0.1 per cent to 17.12Mta with the turnover being 2.7 per cent lower at EUR172m. Ready-mixed concrete deliveries were 0.5 per cent lower at 1.21Mm³ while asphalt sales rose by 11.9 per cent to 0.23Mta. In building products, turnover was 4.2 per cent lower at 127m, but the EBITDA margin did improve from 3.2 per cent to 7.2 per cent.
 
In Africa and the Mediterranean rim, turnover eased by 0.6 per cent to EUR230m and the EBITDA came off by 4.3 per cent to EUR48m. The cement and clinker volume improved by 1.5 per cent to 1.66Mta and the aggregates volume improved by 6.2 per cent to 2.71Mta. Ready-mixed concrete deliveries advanced by 14.5 per cent to 0.76Mm³ but asphalt sales volume fell by 20.8 per cent to 0.10Mta. Cement deliveries in Africa improved by 1.5 per cent to 1.66Mta, with growth coming from Ghana, Tanzania, Liberia and Sierra Leone. In Togo, domestic deliveries were ahead but exports declined. Production problems in Congo led to lower shipments, in spite of good demand. Additional capacities are expected to come on stream later this year in Ghana, Tanzania, Burkina Faso and Togo. Cement and clinker shipments by the associate Akçansa rose by 9.8 per cent. Aggregates deliveries in Spain showed an improvement, but ready-mixed concrete deliveries there continued to fall. In Israel, ready-mixed concrete deliveries rose but asphalt shipments fell.

Published under Cement News

Tagged Under: 1Q14 HeidelbergCement