Holcim held back by weaker Indian and Mexican markets

Holcim's turnover for the first nine months declined by 6.1 per cent to CHF14,941m, as weaker Indian and Mexican markets hold back the company's performance. In euro terms the reduction was 8.0 per cent to EUR12,136m and in US dollar terms the decline was 5.7 per cent.

The Asia Pacific region generated 37.5 per cent of group turnover, down from 39.3 per cent a year earlier, while Europe represented 28.4 per cent, up from 26.5 per cent. Latin America contributed 17.1 per cent against 15.6 per cent, North America 15.7 per cent against 14.3 per cent and Africa / Middle East 4.4 per cent. Margins, however, improved and the operating EBITDA was off by a lesser 4.1 per cent to CHF2,951m (EUR2,397m) in Swiss franc terms, and by 6.1 per cent by when measured in euros and off by 3.7 per cent in US dollar terms. The contributions from the associates, the largest of which is in China, were stable at around CHF100m.

The trading profit decreased by 1.7 per cent to CHF1798m (EUR1460m) but the net attributable profit rose by 33.5 per cent to CHF1040m (EUR845m).

Net debt at the end of September was 11.2 per cent lower at CHF10,280m (EUR8,350m), giving a gearing level of 54.9 per cent compared with 56.3 per cent a year earlier.

Capital investment during the nine months was 33.9 per cent lower at CHF848m (EUR689m), with maintenance capital expenditure ahead by 3.8 per cent to Sw.Fr. 387m (EUR314m) and expansion investments absorbing 97.3 per cent less at CHF.461m (EUR374m). For the full year, Holcim is indicating capital expenditure of some CHF2200m, of which around CHF750m, or some 34 per cent, would be maintenance expenditure.

Group cement capacity stands at 206.4Mt, which is 4.9 per cent lower than a year ago. Cement shipments were 2.6 per cent lower at 104.3Mt, which represents an underlying decline of 1.9 per cent. Sales of other binders dropped by 25.8 per cent, or by 14.7 per cent on an underlying basis, to 2.7Mt. Shipments of aggregates were 3.7 per cent lower at 114.8Mt and ready-mixed concrete deliveries were off by 14.3 per cent to 29.5Mm³ while the asphalt volume eased by 3.1 per cent to 6.4Mt.

Performance by region
The Asia Pacific turnover came off by 10.8 per cent to CHF5,604m (EUR4,552m) and the EBITDA fell by 18 per cent to CHF1,131m (EUR919m) but the decline was a more modest nine per cent on a comparable basis. Cement deliveries in Asia were 1.4 per cent lower at 50.5Mt while deliveries of aggregates being 4.9 per cent lower at 1.7Mt but ready-mixed concrete deliveries improved by one per cent to 4.5Mm³. Cement shipments rose by 1.6 per cent in the Philippines, where the price increased by 7.9 per cent and by 14.7 per cent in Sri Lanka, though the price there fell by 12.6 per cent. In Indonesia, prices rose by 6.4 per cent though domestic deliveries were 2.8 per cent lower. Cement prices eased by five per cent in India and by 3.6 per cent in Malaysia, with volumes easing by 1.2 per cent in India but increasing by 4.2 per cent in Malaysia. Both Bangladesh and Vietnam somewhat lower volumes but prices were slightly ahead. In Australia and New Zealand, cement shipments dropped by 32.4 per cent to 2.3Mt, though the underlying decline was a more modest 10.7 per cent. Sales of aggregates and concrete declined by 6.2 per cent to 17.2Mt and by 14.4 per cent to 3.6Mm³ respectively. Cement deliveries declined by an underlying 0.2 per cent in Australia and by 6.3 per cent in New Zealand.
 
The European turnover declined by 4.3 per cent to CHF4,244m (EUR3,447m) though it improved by 0.8 per cent on an underlying basis. The corresponding EBITDA, however, rose by 21 per cent to CHF693m (EUR563m). Cement deliveries edged ahead by 0.7 per cent to 20.2Mt while shipments of aggregates amounted to 55.2Mt, 0.8 per cent up on a comparative basis but actually 1.8 per cent lower. Ready-mixed concrete deliveries fell by 19.7 per cent to 8.9Mm³, largely reflecting disposals, but the asphalt volume improved by 3.2 per cent to 3.6Mt. In cement, Slovakia provided the strongest performance with a 39.9 per cent volume increase, ahead of Azerbaijan (+21.5 per cent), Bulgaria (+15.5 per cent), Russia (+8.2 per cent) and Croatia (+2.5). The other markets all took less cement, with double-digit reductions in Serbia, Italy and Hungary. Because of the depressed market in Spain, about half of Holcim's production there was exported. Prices were modestly ahead in Hungary, Rumania, France and Germany, but declined elsewhere. Aggregates deliveries increased in dounle-tigits in France, Bulgaria and Switzerland, but declined in notably in Spain, Rumania and Germany, while prices eased in all markets except Great Britain and Spain,

In Latin America, turnover eased by 2.2 per cent to CHF2,556m (EUR2,076m), but the EBITDA advanced by 2.1 per cent to CHF736m (EUR598m). Cement shipments were 0.8 per cent ahead at 18.7Mt, but aggregates deliveries fell by 24.1 per cent to 8.0Mt and ready-mixed concrete volumes fell by 20.0 per cent to 6.2Mm³. Holcim Apasco in Mexico saw cement deliveries decline by 9.7 per cent, though exports were ahead, and prices ease by 6.1 per cent, while aggregates volumes came off by 24.8 per cent though the average price did improve by 5.4 per cent. Holcim Brazil saw volumes fall by 4.9 per cent in cement and improve by 1.6 per cent in aggregates. Holcim Colombia's cement shipments declined by 3.4 per cent but the price improved by 5.7 per cent. Argentina also performed well, but these numbers have yet to be published, a delay that also applies to Chile, which also performed well. Among the strongest volume improvements were Costa Rica (+18.9) and Ecuador (+12.3 per cent), but less cement was sold in El Salvador and Nicaragua.

The North American turnover came off by 2.1 per cent to CHF2,343m (EUR1,903m), but the EBITDA improved by a further 6.2 per cent to CHF370m (EUR301m) and the trading profit by 32.0 per cent to CHF147m (EUR119m). Cement shipments were 1.9 per cent lower at 8.7Mt in response to adverse weather conditions that left Canadian volumes down by 7.6 per cent and US volumes by off 1.4 per cent. Prices, however, improved by 4.5 per cent in Canada and by 6.0 per cent in the USA. Aggregates deliveries improved by 1.8 per cent to 31.1Mt as shipments declined by 0.6 per cent in Canada, but rose 3.2 per cent in the USA. Ready-mixed concrete volumes came off by 5.7 per cent to 5.7Mm³ and sales of asphalt declined by 10.1 per cent to 2.8Mt respectively. The US operations had a further good month in October, but the final quarter's results will depend on when winter hits production. Turnover in Africa and the Middle East declined by 8.4 per cent to CHF666m (EUR541m) but the EBITDA was off by just 2.3 per cent to CHF215m (EUR175m).

Reduced outlook
Having previously forecast an increase in sales this year, Holcim has now said it “does not expect to reach the previous year’s sales volumes of cement, aggregates and ready-mix concrete in 2013.” While group region Europe is expected to witness higher cement sales volumes, Holcim is somewhat less optimistic with regard to Latin and North America and Africa Middle East. In Asia Pacific cement sales are expected to reach similar levels to previous year.