HeidelbergCement reports double-digit increase in sales volumes in 1Q14, thanks to mild winter weather and the improving economy in Europe, a stable performance in North America despite adverse weather conditions, and the continued positive development of markets in Asia and Africa. In all, cement and clinker sales rose by 10% to 17.5 million t across all markets.
Group revenue for the January – March quarter rose by 5.7% to €2750 million, reflecting the positive sales volumes in all business lines and successful price increases in major markets. Excluding consolidation and exchange rate effects, the revenue increase amounted to 14.8%; consolidation brought positive effects amounting to €18 million, while the weakening of numerous currencies against the euro had a negative impact, amounting to €221 million.
Operating income increases
Operating income before depreciation (OIBD), which now includes the net results of joint ventures that are not included in the operating income, rose 15.6% to €229 million. This is partly related to the higher sales volumes and revenues, but also includes €22 million from the joint venture companies, up from €7 million in 1Q13. Operating income increased to €50 million – a significant increase on last year’s €9 million.
Profit before tax from continuing operations rose by €60 million to €-104 million. Expenses relating to taxes on income decreased by €21 million to €2 million. As a result, net income from continuing operations increased to €-106 million. The overall loss for the period was €-108 million, reduced from €-187 million in 1Q13.
Outlook for 2014
HeidelbergCement expects a continuing economic recovery in North America and improved demand for building materials. Poland is set to do well and the company also expects a further rise in demand for building materials in Central Asia and the continued positive development of markets in Western and Northern Europe. In Asia and Africa, HeidelbergCement anticipates sustained growth in demand. An increase in overall sales volumes is expected, given the positive development of demand and the commissioning of new capacities.
The Group forecasts a light to moderate rise in the cost base for energy, raw materials and personnel and plans to offset this by continuing to pursue its price initiatives and cost efficiency measures.
The Managing Board has set the goal of further increasing revenue, operating income and profit for this financial year on a comparable basis.
“Business development in the first quarter has strengthened our confidence in the outlook for the 2014 financial year,” says Dr Bernd Schiefele. “Deleveraging in order to regain investment grade rating remains the highest priority for us. To this end, we will continue to be very disciplined in our spending in 2014 and focus more intensively on the sale of the building products business line in the United Kingdom and North America, as well as other assets that do not belong to our core business. At the same time we will remain on course with our successful strategy of targeted expansion of our cement capacities in growth markets. We will continue unabatedly with our programmes to improve margins – ‘PERFORM’ in the cement business, ‘CLIMB Commercial’ in the aggregate business and ‘LEO’ to optimise logistics.”
Adapted from press release by Katherine Guenioui
Read the article online at: https://www.worldcement.com/europe-cis/07052014/heidelberg_cement_reports_on_positive_1q14_149/