HeidelbergCement expects recent tax reform passed the US to have a “positive effect of group net profit and cashflow” from 2019, despite announcing a one-off US$200 million hit to its 2017 balance sheet as a result of changes to regulations brought in the reform.
The writedown is “not cash effective and no impact on earnings before tax or cash flow in 2017”, the company said, adding that the outlook for a significant increase in 2017 group share of profit remained unchanged. The company’s 2017 dividend would also be unaffected.
Going forward, the Germany-based company said that the cutting of the federal corporate tax rate from 35% to 21%, which went into effect from the beginning of 2018, would provide a boost to the company’s net profit and cashflow. The exact impact could not yet be quantified, however, as implementation rules from the US tax authorities were still pending.
Read the article online at: https://www.worldcement.com/the-americas/04012018/heidelbergcement-positive-on-us-tax-reform/