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Cement sales increase for Holcim in 3Q12

World Cement,


Cement sales increase in year to date

In January – September 2012, Holcim’s cement sales reached 111.4 million t, up 3% from the 108.1 million t sold in the same period last year. However, sales of aggregates fell 7.7% to 120.3 million t. Ready-mix concrete and asphalt suffered a similar decline, dropping by 1.7% and 14%, respectively. The decrease in asphalt sales levels, which came in at 6.6 million t, has been attributed to poor business development in the UK market.

Consolidated net sales experienced 4.8% growth, rising to CHF16.2 billion in the first nine months of the year. Operating EBITDA and operating profit also increased by 5.9% and 7.2%, respectively. Net income rose by 10.3% from CHF1 billion to CHF1.1 billion. These positive results have been boosted by increased demand for building materials in North America, the company’s performance in emerging markets, as well as enhanced efficiency and the early results of the Holcim Leadership Journey. The latter has begun to be implemented at both Group and regional level. It includes measures such as a pared down management structure in Europe in response to the financial situation in the region, a new Project Management Office and guidelines to monitor the plan’s progress.

Quarterly results

In 3Q12, net sales reached CHF5.8 billion, an increase of 9.8% compared to 3Q11. Operating EBITDA rose by 13% to CHF1.2 billion, with operating profit also up by 13.9%. Net income for July – September 2012 increased by 15.6% y/y to reach CHF484 million.

Cement sales in the quarter experienced growth, rising from 37.2 million t in 3Q11 to 37.3 million t this year. Sales of aggregates, ready-mix concrete and asphalt all declined, falling by 8.9%, 2.5% and 11%, respectively.

3Q12 regional markets

In Asia Pacific, cement sales rose by 1.2% to 18.3 million t, with ready-mix concrete sales levels also increasing to 3.5 million m3. Net sales reached CHF2.2 billion, despite an 11.6% drop in aggregate sales volumes.

The results from Latin America were also positive, with net sales up 9.9% and operating EBITDA up 15.6%. Cement sales increased by 2.5% to 6.4 million t, although aggregates and ready-mix concrete volumes fell by 9.7% and 14.5%, respectively.

Things are also on the up in North America, with ready-mix concrete volumes growing by 7.1% to 2.4 million m3. However, aggregates sales dropped by 12.7% and cement sales fell by 2.1%. On the plus side, net sales experienced 9.2% growth compared to 3Q11, and operating EBITDA was up by 22.9%.

The European markets continue to feel the effects of the economic crisis, as aggregates, ready-mix and asphalt sales dropped by 6%, 3.5% and 10.1%, respectively. Operating EBITDA also fell by 10.3% to CHF295 million. Yet cement sales did increase by 0.7% and net sales rose from CHF1.6 billion in 3Q11 to CHF 1.65 billion in 3Q12.

In contrast to the other regions, cement sales fell in Africa Middle East, down by 8.4% to 1.9 million t. However, sales of aggregates and ready-mix concrete rose by 13.1% and 0.4%, respectively, to reach 0.7 million t and 0.3 million m3. Although operating EBITDA decreased by 12.4% to CHF60 million, net sales increased by 2.3% to reach CHF228 million.

Outlook

The company foresees an increase in demand for construction materials in Asia, Latin America, Russia and Azerbaijan in 2012, as well as higher cement sales in North America. However, sales volumes across all building materials are predicted to decline in Europe. Holcim expects to achieve organic growth in terms of operating EBITDA this year, and to feel the positive impacts of the Holcim Leadership Journey.

Adapted from press release by Louise Fordham.

Read the article online at: https://www.worldcement.com/europe-cis/07112012/cement_holcim_quarterly_sales_financial_results_729/


 

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