Holcim H1 results: cement/aggregates sales increase

680 Holcim says its first half-year 2014 results show cement volumes up and a like-for-like growth in operating EBITDA and operating profit based on recent restructurings and cost discipline.

Bernard Fontana, CEO, said: “Holcim increased sales of both cement and aggregates in the first half of 2014, despite an uneven development of the global economy.

“Group regions North America, Africa Middle East and Europe recorded particularly strong cement sales. Mild weather conditions at the beginning of the year supported building activity, especially in Europe where the group continued to restructure activities in 2014.

“In Asia the market situation stabilised, and as a result 4577 ACC and 4380 Ambuja Cements in India, Holcim’s largest group companies in the region, were able to increase cement sales.”

The company reported that on a like-for-like basis operating EBITDA increased slightly and operating profit was up too, with higher cement volumes across many parts of the group and the ongoing momentum of the Holcim Leadership Journey and strict cost management being the main reasons for this positive development.

However in Swiss Francs the operating performance continued to be negatively impacted by exchange rate effects. Restructuring and merger costs of CHF 50 million (approximately €41 million) also impacted operating EBITDA.

Compared to the first half 2013, ROIC before taxes improved from 7.1% to 8.4% while net financial debt decreased.

The company said that consolidated cement sales rose in the first half of 2014 by 2% to 70 million tonnes; aggregates volumes increased slightly by 0.2% to 69.6 million tonnes, and ready-mix concrete volumes were down 3.9% to 18.1 million m³. Asphalt volumes increased by 21.8% to 4.1 million tonnes.

Group-wide net sales decreased by 6.1% to CHF 9.06 billion (€7.45 billion), with negative currency effects across the whole of Latin America as well as in India, Indonesia, and other markets taking their toll. On a like-for-like basis, net sales increased by 4.8%.

Like-for-like operating EBITDA for the group increased by 0.2% and adjusted for restructuring and merger costs it increased by 3% and operating profit by 8.3%.

Consolidated operating EBITDA decreased by 10.6% to CHF 1,627 million (€1,338 million)

Net income fell by 13.5% to CHF 657 million (€540 million) compared to the previous year which benefitted from the gain of a reduction of participation in Cement Australia. Net income attributable to shareholders of Holcim Ltd declined by 14.9% to CHF 485 million (nearly €400 million).

For 2014 Holcim expects the global economies to show another year of uneven performance.