HeidelbergCement announces 7% rise in EBITDA for 3Q17

HeidelbergCement has announced for the third quarter of 2017 a seven per cent YoY rise in EBITDA from its current operations to EUR1058m on a comparable basis (adjusted for currency and consolidation effects). After depreciation and amortisation, the result from current operations grew by seven to EUR787m (3Q16: EUR738m).

On a comparable basis, the rise in result from current operations before and after depreciation and amortisation amounted to seven and eight, respectively. “Besides the growth in sales volumes and price increases in important core markets, the realisation of synergies in particular and an efficient cost management also made a contribution to the positive development of results,” said the company in a statement.

The company’s revenues increased four per cent on a comparable basis to EUR4.61bn in 3Q17 from EUR4.52bn in 3Q16. The company attributed the rise in increases in sales volumes as well as price rises to offset inflation. However, exchange rate effects reduced revenues by EUR193m.

Strengthening sales
The company reported a good performance of its North American operations despite adverse weather conditions. Australian, Moroccan and Indian markets recorded the strongest growth along with markets in northern and eastern Europe. While Germany achieved significant growth, the Brexit-related uncertainties negatively affected sales volumes and results in the United Kingdom. The weak markets in some emerging countries, such as Ghana, Indonesia, Thailand, and Egypt, have passed their lowest point. Indonesia and Ghana show again clear signs of recovery of demand, said HeidelbergCement.

“As expected, the positive trend reversal in May led to a significantly improved development of results in the third quarter”, says Chairman of the Managing Board, Dr Bernd Scheifele. “North America, Australia, Morocco, India, as well as Northern and Eastern Europe have developed very strongly. The countries of Southern Europe are showing clear signs of recovery, and the emerging countries have passed their lowest point. We have succeeded in reducing the rise in energy costs through the flexible use of various fuels. Synergies from the acquisition of Italcementi have already significantly exceeded the target for 2017. Furthermore, the refinancing of our maturities on favourable terms has made a clear impact on both result and cash flow. All in all, we have substantially increased the Group share of profit for the period and earnings per share. In this way, we clearly show that we are able to create value for our shareholders from the Italcementi takeover.”

Clinker and cement sales volumes in the third quarter grew by two per cent to 33.7Mt from 33.2Mt in 3Q16. The strongest expansion was achieved in the Asia-Pacific group area with robust growth also reported in Africa-eastern Mediterranean Basin as well as western and southern Europe.

Aggregate deliveries rose by eight per cent to 86.7Mt from 80.3Mt in 3Q16, supported by higher sales volumes in all group areas, apart from western and southern Europe, as well as the consolidation of the Mibau Group in northern Europe.

Deliveries of ready-mixed concrete slipped by 0.5 per cent to 12.4Mm3 when compared with 12.5Mt in 3Q16. Asphalt sales volumes edged up by three per cent YoY from 3.1Mt to 3.2Mt.

9M17 results
In the first nine months of the year, group revenue rose considerably by 19 per cent to EUR13bn (9M16: EUR10.9bn) as a result of the consolidation. The result from current operations before depreciation and amortisation improved by 13 per cent to EUR2405m (9M16: EUR2121m); after depreciation and amortisation, it rose by seven per cent to EUR1578m (9M16: EUR1477m).

On a comparable pro forma basis, revenue exceeded the previous year’s level by one per cent. The result from current operations before and after depreciation and amortisation increased slightly by one  per cent. The additional ordinary result improved by EUR56m to EUR-42m (9M16: EUR-98m). The financial result increased by EUR78m to EUR-285m (previous year: -363), particularly because of a reduction in interest expenses. Expenses relating to taxes on income increased by EUR100m to EUR400m (9M16: 300m) owing to the first-time consolidation of the Italcementi Group and a non-recurring effect in Indonesia in the previous year. The group share of profit grew considerably by 31 per cent to EUR768m (9M16: EUR585m) and the earnings per share to EUR3.87 (9M16: EUR3.06).

In terms of 9M17 volumes, cement and clinker sales volumes rose by 29 per cent to 94.4Mt (9M16: 73Mt), due to the consolidation of Italcementi. Deliveries of aggregates climbed by 15 per cent to 229Mt (9M16: 198.7Mt) and deliveries of ready-mixed concrete also rose by 15 per cent to 35mm3 (9M16: 30.4Mm3). Asphalt sales volumes remained largely stable at 7.1Mt.

On a pro forma basis, which reflects the inclusion of Italcementi in 1H16 and adjusted for currency and consolidation effects, cement and clinker sales volumes showed a marginal increase. Deliveries of aggregates rose by seven per cent, while deliveries of ready-mixed concrete fell by three per cent.