Holcim is due to report its H1 results at 6am London time on Friday 27 August. Analysts at JP Morgan expects it to report around a 7% increase in sales, 17% growth in operating profit and 29% higher earnings.
JP Morgan are assuming that growth will have slowed in the second quarter. Q1 2004 benefited from an easier comparative, as Q1 2003 was negatively impacted by poor weather in the northern hemisphere. As far as we are aware there was not be a significant weather distortion in the second quarter.
The North American operations will in JP Morgan’s view probably report the largest regional increase in operating profits and is forecasting a 69% increase H1 2004 vs H1 2003. St Lawrence Cement, Holcim’s Canadian subsidiary has already reported a 40% increase in its H1 2004 profit contribution.
Last year’s Q2 profit contribution from the US businesses was negatively impacted by a one-off $11m charge as the head office of the US operations was moved to Boston.
Holcim will, in JP Morgan’s view, have benefited in H1 2004 from higher volumes and pricing, but it will be examining the results carefully to try to quantify the impact from cost savings. JP Morgan stimates that the 31% improvement in Holcim’s Q1 operating profit was almost equally split between the benefit of higher volumes and cost cutting.
