Holcim’s net income rises despite fall in sales volumes

Highlights 1Q13

Holcim has announced its results for the first quarter of 2013. The period saw total net sales decline by 7.2% to CHF4.3 billion, while EBITDA was down 9.5% to CHF650 million. Operating profit dropped by 17.8% to CHF270 million, however, net income increased by 164.1% y/y to reach CHF295 million. While poor weather and market conditions impacted sales volumes and affected operating results, price improvements, cost savings and improved results in Europe and Latin America helped to drive growth. Operating EBITDA was up by 9.8% and 42.9% in Latin America and Europe, respectively.

Sales results

Cement sales declined by 5% in 1Q13, falling from 33.7 million t to 32.1 million t. Growth occurred in Ecuador, Russia and Azerbaijan. On a regional level, sales volumes were down in Asia Pacific, Europe, North America and Africa Middle East by 3.8%, 2.5%, 8.4% and 18%, respectively. They remained stable in Latin America at 5.9 million t.

Aggregates sales volumes dropped by 8.6% from 31.3 million t to 28.6 million t. Despite favourable conditions in Switzerland, volumes fell in Australia, Ecuador and Spain. The biggest percentage decline occurred in Latin America, where aggregates volumes decreased by 25.1% to 2.7 million t.

Sales of ready-mix concrete were down 16.8% to 8.4 million m3, principally caused by restructuring measures. Asphalt sales volumes fell to 1.1 million t, 17.7% lower than the 1.4 million t recorded in 1Q12.

Outlook

Holcim expects cement sales to rise in 2013 but is less optimistic about sales volumes of ready-mix concrete and aggregates. Volumes are likely to increase in Asia Pacific, North America and Latin America. The company predicts that there will be organic growth in operating EBITDA and operating profit, and that the Holcim Leadership Journey will continue to gain momentum. The Holcim Leadership Journey is on target, with the Customer Excellence work stream contributing CHF26 million to operating profit in 1Q13 and the Cost Leadership work stream contributing CHF143 million.

Adapted from press release by Louise Fordham.

Read the article online at: https://www.worldcement.com/europe-cis/08052013/holcim_1q13_results_cement_972/