HeidelbergCement swung to profit in 1Q18 as the impact of portfolio optimisation efforts offset the negative impact of winter weather and an early Easter holiday in Europe. There were also positive growth signals for the remainder of the year, as sales volumes rose in the quarter with price increases to come into effect in the second quarter.
“HeidelbergCement generated a profit in the seasonally weak first quarter and despite difficult weather conditions,” said Dr Bernd Scheifele, Chairman of the Managing Board.
“Our successful management of the portfolio and financial result more than compensated for the weather-related decline in operating results. With positive underlying market dynamics, we’re confident that we can significantly increase our operational performance in the company quarters.”
Portfolio optimisation boosted the financial results by over €100 million, HeidelbergCement said. The company concluded the sale of a sand-lime brick operating line in Germany and a white cement business in the US in the quarter, while the acquisition of Cementir Italia in Italy and Alex Fraser Group in Australia were also completed.
Despite the positive bottom lime, group revenue and earnings both fell over the quarter. Group revenue was down 4%, as a strengthening euro hit the company. A long winter in North America and Europe, as well as reduced number of working days due to an early Easter holiday, also negatively impacted the results.
Despite this, sales volumes were up 2% at 28.2 million t with growth in the company’s Asia-Pacific and Africa-Eastern Mediterranean Basin businesses more than offsetting a soft quarter in North America and Europe. In Asia, Indonesia and India were particular bright spots, while in Africa substantial sales volume growth was also recorded in Egypt, Ghana, and Tanzania.
With an expected return to growth in North America and Europe in 2Q18, the company was positive on its outlook for the full year, projecting an increase in sales volumes across its product lines, as well as a significantly improving profit.
“With the positive underlying market dynamics, we’re confident about 2018,” concluded Dr Scheifele. “HeidelbergCement is globally well positioned for sustainable and profitable growth.”
Read the article online at: https://www.worldcement.com/europe-cis/15052018/heidelbergcement-offers-picture-of-growth-in-2018/