Europe holds back Holcim
Holcim’s first quarter turnover improved by 2.2% to CHF4,760m (€3,922m), which represents an increase of 7.1% on a comparable basis and measured in euros the turnover advanced by 8.1%. The operating EBITDA eased by 1.1% to CHF745m (€614m), which represents a 4.6% advance in euro terms. The trading profit edged up by 0.5% to CHF349m (€287m), while at the net attributable level there was small profit of CHF10m (€8m), representing an improvement of 1.1%, or of 7% in euro terms. Net debt at the end of March stood at CHF11,772m (€9770m), an increase of 1.9%, to give a gearing level of 59.8%, compared with 58.6% a year earlier. Details of the restructuring of parts of the business to improve returns should be announced next month.
Cement deliveries rose by 6.2% to 35.2Mt while mineral components volumes were off by 29.8% to 0.82Mt, having more than doubled a year earlier. The aggregates volume was down by 7.8% to 31.6Mt and ready-mixed concrete deliveries eased by 0.3% to 10.4Mm³, while sales of asphalt mix fell by 18.4% to 1.4Mt.
The Asia Pacific area, by far the group’s largest accounting for 44.8% of turnover, or CHF2004m (€1591m), a 1.6% reduction in francs but a 3.8% increase in euro terms. The EBITDA improved by 4.9% to CHF495m (€408m). Cement deliveries rose by 9.7% to 21.2Mt, with the strongest increases coming from Indonesia, the Philippines, New Zealand and Sri Lanka, followed by India, the largest single market, where combined cement and clinker volumes by the Holcim subsidiaries ACC Limited and Ambuja Cements rose by 10.3% to 12.8Mt. Only in Vietnam was there a substantial fall in cement shipments, which fell by 25.1% there, but the price did rise by 21.8%. Bangladesh also performed well, with volumes ahead by 7.3% and prices rising by 16.4% and a new 0.7Mta grinding plant is currently being built. Area aggregates shipments, dominated by Australia, declined by 3.3% to 6.6Mt because of the strong Australian weighting while Asian volumes did improve by 3.9%. Ready-mixed concrete deliveries in the are declined by 2.0% to 3.0m m³, again with most of the reduction taking place in Australia.
Holcim’s European turnover, down from 28.3% to 23.4% of the group total, fell by 14.9% to CHF1,161m (€957m) and the EBITDA dropped by 71.8% to CHF21m (€17m). There was a CHF.6m gain from the sale of emission rights, compared nothing last year, but a CHF65m gain the year before. Cement deliveries declined by 13.2% to 4.5Mt, by 17.7% in aggregates to 15.1Mt, by 16.8% in ready-mixed concrete to 3Mm³ and from 1.5Mt to 1.2Mt in asphalt. The lower volumes reflect a hard winter after an unusually mild winter last year. Thanks to volume increases of 23.1% in Azerbaijan and of 12.8% in Russia, cement volumes were just 2.2% lower in the emerging markets in Europe compared with a 20.0% drop in the mature markets. An aggregates, a 1.5% reduction in emerging markets compared with a drop of 18.2% in mature markets to give a total reduction of 18.0% to 15.1Mt, while for ready-mixed concrete the reductions were – 4.5% and -16.8% respectively to give a 15.9% decline to 3Mm³. Six countries saw cement deliveries drop by at least 20%. The worst performance was registered in Bulgaria with a 39.8% drop, followed by Spain (-35.6%), Italy (31.4%), Slovakia (-27.2%), Switzerland (-23.1%) and Belgium (-23%). Cement prices recovered by 32.9% in Italy and by 29.8% in Russia, while only in two countries were there significant price falls, in Hungary and in the Czech Republic.
The Latin American turnover improved by 6.2% to CHF854m (€704m), or by 11.9% in local currencies, and the EBITDA emerged 3.3% higher at CHF224m (€185m). Cement deliveries were 5.3% higher at 5.9Mt, while aggregates shipments were 6.3% higher at 3.5Mt and ready-mixed concrete deliveries improved by 5.5% to 2.6m m³. Holcim Apasco in Mexico increased cement deliveries by 6.7% at stable prices while aggregates volumes were up by 11.4%. Brazilian cement volumes improved by 4.4% in the quarter, with prices being 1.9% higher and the aggregates volume rose by 14% and the average price by 7.6%. Chilean and Argentinean cement volumes improved but downstream activities suffered from increased competitive pressures. Colombia remained a strong market, with cement deliveries advancing by 18.4% and prices by 29.1%. Strong demand was also seen in Nicaragua and in El Salvador, where cement shipments rose by 17.9% and by 14.4% respectively. Costa Rica, on the other hand, continued to suffer from lower volumes and prices.
Helped by better weather, turnover in North America recovered by 20.7% to CHF478m (€394m) and the seasonal loss at the EBITDA level was reduced yet again to CHF16m (€13m). Cement deliveries rose by 18.5% to 2.1Mt, with Texas and the Midwest showing the strongest performances. US cement shipments rose by 21,8% while the average price eased by 0.4%. In Canada, cement volumes rose by 17.8% with the price being off by 1.0% after having been pretty firm for a number of years. Sales of aggregates improved by 8.8% to 5.9Mt as average prices improved by 9.3%. US volumes rose by 22.2% and prices improved by 6.1%, while in Canada volumes were 12.1% higher and the average price increased by 3.2%. North American ready-mixed concrete deliveries were 53.0% higher at 1.4m m³, helped by acquisitions and the underlying growth was 23.3%. The asphalt volume declined by 2.8% to 0.2Mt.
Turnover in Africa and the Middle East improved by 9.6% to CHF239m (€197m) and the EBITDA was up by 7.6% to CHF78m (€64m). Cement shipments in the region rose by 12.0% to 2.2Mt. Morocco is the biggest market and provided most of the growth, helped by both residential and infrastructure construction projects. A doubling of the clinker capacity at the Fez works to 0.8Mt should be completed during the second half of this year. Cement sales in Madagascar and Mauritius improved, but volumes were lower in the Lebanon, largely because of the political uncertainty. Aggregates shipments rose by 18.7% to 0.5Mt, while ready-mixed concrete deliveries were 0.4% higher at 0.3Mm³.
