Asia contributes strongly to HeidelbergCement 1Q18 results

Asia contributes strongly to HeidelbergCement 1Q18 results
09 May 2018


HeidelbergCement's 1Q18 results saw sales volumes in Europe and North America impaired by a long winter and a reduced number of working days, but some emerging countries recorded considerable increases. Declining sales volumes in Europe and North America were more than offset by significant growth in Asia-Pacific and Africa-Eastern Mediterranean Basin, reports HeidelbergCement.

During the first quarter, the group's cement and clinker sales volumes rose by two per cent to 28.2Mt (previous year: 27.5Mt). In Asia, particularly Indonesia and India contributed strongly to growth. In Africa substantial increases in sales volumes were recorded in Egypt, Ghana, and Tanzania.

Deliveries of aggregates fell by two per cent to 59.5Mt (previous year: 60.9Mt). Strong growth in Asia-Pacific did not fully compensate for the weather-related decline in sales volumes in Europe and North America.
 
Deliveries of ready-mixed concrete also decreased by two per cent to 10.2Mm3 (previous year: 10.4Mm3) because of the adverse weather conditions. In contrast, asphalt sales volumes improved considerably by 11 per cent to 1.6Mt (previous year: 1.5Mt) owing to the positive development of demand in California and consolidation effects in the northwest of the USA.

Group revenue fell by four per cent in 1Q18 to EUR3.6bn (previous year: EUR3.8bn). Negative currency effects of EUR-264m had an adverse impact on revenue. Adjusted for currency and consolidation effects, revenue increased by two per cent. Energy costs rose noticeably due to a low starting point in the same quarter of the previous year. Price increases, which have been announced in many markets, will become visible in the second quarter.

Results from current operations before depreciation and amortisation decreased by 34 per cent to EUR252m (previous year: EUR383m). After depreciation and amortisation, the result from current operations fell to EUR-16m (previous year: EUR108m). Adjusted for currency and consolidation effects, the decrease in the result from current operations before depreciation and amortisation amounted to EUR88m.

"HeidelbergCement generated a profit in the seasonally weak first quarter and despite difficult weather conditions," said Dr Bernd Scheifele, chairman of the Managing Board. "Our successful management of the portfolio and financial result more than compensated for the weather-related decline in operating result. With the positive underlying market dynamics, we’re confident that we can significantly increase our operational performance in the coming quarters and we remain committed to our goals for the financial year.” 

HeidelbergCement achieved a profit for the period of EUR6m, compared with a loss of EUR35m in the previous year’s first quarter, which is typically weak because of seasonal factors.

In the first quarter, HeidelbergCement concluded a number of important transactions for the purposes of portfolio optimisation. These include the acquisition of Cementir Italia in Italy and the Alex Fraser Group in Australia, as well as the sale of the sand-lime brick operating line in Germany and the white cement business in the USA. As a result, total net investments increased to EU448m (previous year: EUR139m) in the first quarter. Net investments of around EUR1.1bn are planned for the full year.


Published under Cement News