HeidelbergCement reports rise in revenues and earnings for 3Q18

HeidelbergCement reports rise in revenues and earnings for 3Q18
08 November 2018

HeidelbergCement saw a 7.2 per cent rise in revenues to EUR4.943bn in 3Q18 from EUR4.61bn in the year-ago period. EBITDA fell 6.3 per cent to EUR750m in July-September 2018 from EUR800m in July-September 2017 while net profit increased by 12 per cent to EUR580m from EUR518m in the year-ago period.

HeidelbergCement reported a five per cent rise in cement and clinker sales to 35.1Mt in the third quarter of 2018 from 33.4Mt in 3Q17. Following adjustment for the disposal of its US white cement business, the deconsolidation of the business in Georgia and the acquisition of Cementir Italia, sales advanced by six per cent, according to the company. While volumes rose above average in emerging countries, harsh weather in Texas, the Midwest and the northeast of the USA impacted on the North American growth rate.

Deliveries of aggregates edged up by one per cent to 87.7Mt (previous year: 86.6Mt). With the exception of Africa-Eastern Mediterranean Basin, all group areas recorded increasing volumes.
Deliveries of ready-mixed concrete also advanced in all group areas, rising by four per cent to 12.9Mm3 (previous year: 12.4Mm3). Asphalt sales volumes improved by five per cent to 3.4Mt when compared with 3.2Mt in the year-ago period, owing to the positive development of demand in the UK and in California as well as consolidation effects in the northwest of the USA and Australia. Excluding consolidation effects, sales volumes came in slightly above last year’s level.

9M18 results
Group revenues in the first nine months of 2018 edged up by 2.9 per cent YoY to EUR13.375bn from EUR13.004bn in the previous year’s period. Excluding consolidation and exchange rate effects, the group noted a 7.4 per cent increase in revenues.

EBITDA contracted by 7.4 per cent to EUR2.227m in 9M18 from EUR2.405bn in 9M17, primarily due to the negative exchange rate effects of EUR121m and changes to the scope of consolidation of EUR-22m. The company attributes a decline of EUR36m in operational terms mainly to a rise in material costs. The result from current operations fell by 10.6 per cent to EUR1.411bn with exchange rate effects of EUR-86m and changes to the scope of consolidation of EUR-31m as key drivers in this reduction.

Profit before tax from continuing operations deteriorated by EUR4m to EUR1.287bn (previous year: EUR1.291bn). Net profit for the period totals EUR1.016bn, up considerably from EUR880m in the 9M17.

In terms of its operating regions and its cement business, the Western and Southern Europe Group area reported a 5.6 per cent rise in cement volumes to 23Mt in the first nine months of 2018. The increase is mainly attributable to the newly-included cement activities of Cementir in Italy as well as increased volumes in France and Spain. In Germany, Belgium, The Netherlands and the UK, volumes remained slightly below the year-ago level.

In the Northern and Eastern Europe-Central Asia group area cement and clinker deliveries fell 2.7 per cent to 19.3Mt as a result of consolidation. Excluding the effects of deconsolidation in Georgia, sales volumes were up 3.7 per cent. Growth in Swedish and Icelandic volumes did not fully offset losses booked in Norway and Denmark, which resulted in an overall decline of volumes in the northern European countries. Eastern Europe and central Asia also presented a mixed bag. Volumes fell in Bulgaria, Ukraine and Russia, while the market in Romania remained stable. In the Czech Republic and Poland gains were made while in Greece and Kazakhstan deliveries also rose YoY.

Cement sales volumes in North America decreased 1.7 per cent YoY to 12.1Mt in the first nine months. Excluding the consolidation effects from the purchase of a cement plant and the sale of the white cement business,s ales volumes exceeded marginally by 0.2 per cent when compared with the year-ago period. High demand on the west coast of Canada drove volumes for the country while a lively construction market, particularly in California, supported the considerable growth in volumes in the region. In the south volumes recovered after an initial drop due to bad weather early in the year but the effects of inclement weather in the winter, spring and September persisted in the 9M18 results.

In Asia-Pacific cement and clinker deliveries advanced by 7.8 per cent to 27.3Mt when compared with 25.3Mt in 9M17. Indocement saw its volumes rise by 6.6 per cent while in India infrastructure demand drove a rise in cement and clinker deliveries for the Group. However, pricing pressure in the south persisted. The second quarter saw the signs of a market recovery in Thailand and as a result, by the end of the nine-month period, HeidelbergCement was able to record a slight increase in deliveries. In Bangladesh the group also reported a “pleasing increase”.

Cement and clinker volumes of the Africa-Eastern Mediterranean Basin Group area grew by 6.5 per cent YoY to 14.9Mt. “In most countries south of the Sahara, we recorded considerable increases in volumes thanks to lively construction activity. Ghana, Tanzania, and Sierra Leone made particularly strong contributions to this growth in sales volumes. In Ghana, our main market, our deliveries benefited from the strong demand particularly from residential construction. We also recorded pleasing increases in sales volumes in Benin, Liberia, Mozambique, and particularly in the Democratic Republic of Congo,” said HeidelbergCement in a statement. However, deliveries in Togo were modestly down YoY. North African countries also recorded a moderate growth in volumes. The considerable increase in Egypt offset the slight dip in Morocco.


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