Holcim half year results

No global economic recovery

Holcim do not see signs of a global economic recovery, even though the overall economic picture improved slightly in the first half of 2010. There are still elements of uncertainty that make forecasting difficult. These include high levels of government debt that are limiting stimulus programmes, particularly in Europe. Even though the US economy has improved, the upturn is not yet broadly based.

Brief overview

In some Western European markets and in North America, demand for building materials increased, and Asia remained on a growth trajectory. Latin America and in particular Group region Africa Middle East held up well. The group benefited from its strong presence in the emerging markets, which accounted for more than 50% of consolidated net sales and more than 70% of operating EBITDA in the first half of this year. The large Asian economies such as India, Indonesia and the Philippines recorded particularly strong growth. Brazil witnessed a similar trend. Progress was also made in mature markets, particularly in North America. Mention is specially made of the important contribution by Holcim Australia with its substantial positions in the aggregates and ready mix concrete sectors, now fully consolidated since last autumn together with the local Holcim cement group.

Measures to cut costs and boost efficiency continue. Despite the commissioning of approximately 5 million t of new cement capacity, fixed costs on a like-for-like basis were reduced compared with the same period a year ago. Consolidated cement sales grew by 4.1% to 67.8 million t, while sales of aggregates increased by more than 17.1% to 73.2 million t, and ready mix concrete grew by 13.5% to 21.9 million m³. By comparison with the first quarter of 2010, sales increased in all segments.

Consolidated net sales increased by 8.1% to CHF 10.9 billion, and operating EBITDA rose by 9.3% to CHF 2.3 billion

building on double digit growth seen in the previous two months. The biggest contributions to the result came from the mature markets in Australia and North America and from group region Africa Middle East – supported by stringent cost management throughout the group. Due to intensified competition in some markets, price pressure has increased.

Outlook

The economic trend in group regions Europe and North America remains considerably uncertain despite some positive market signals. Holcim expects demand in most countries of Latin America to be stable. Demand in the group regions Africa Middle East and in particular Asia Pacific will grow further.

In the second half of the year, Holcim will continue to concentrate its efforts on factors it can directly influence, such as cost efficiency along the whole value chain and the efficient commissioning of new production facilities in the emerging markets.

In the light of forecast market growth in Indonesia, Holcim has decided to build a new cement plant in Tuban on the main island of Java. The plant, which is expected to come online in the first half of 2013, will have a capacity of 1.6 million t of cement. The new location will supplement the existing production and distribution network and help reduce logistics costs.

Meanwhile, work on the construction of new kiln lines in Shurovo (Russia) and in Garadagh (Azerbaijan) are proceeding according to plan

Read the article online at: https://www.worldcement.com/europe-cis/19082010/holcim_half_year_results/