Third quarter income falls at Holcim
By Helen Wright14 November 2011
Despite reporting an 8.2% year-on-year rise in net sales for the third quarter of 2011 to CHF5.3 billion (€4.3 billion), Swiss cement producer Holcim saw net income fall by 21% to CHF418 million (€338 million) for the period.
This contrast was also reflected in its nine-month results, where sales grew 5.8% to reach CHF15.5 billion (€12.5 billion), but net income fell 5.1% to CHF1 billion (€868 million).
The company said that higher demand from emerging markets had driven the increase in sales, but above-average inflation for energy, transport and raw materials costs had offset this in the income figures.
Consolidated cement deliveries increased by 5.2% to 108.1 million tonnes for the nine-month period to the end of September, 2011. Shipments of aggregates increased by 9.8% to 130.4 million tonnes, and ready-mix concrete rose by 5% to 36.1 million m3. Offsetting this, sales of asphalt fell by 2.2% to 7.6 million tonnes.
Emerging market strength
Holcim's Latin America cement sales reported the strongest rise, followed by Asia Pacific and Europe. Latin America also ranked first in terms of aggregates, while Asia Pacific also achieved double-digit growth. North America experienced a particularly sharp rise in sales of ready-mix concrete.
Looking forwards, the company said it expected demand for construction materials in Europe to remain solid in many places. In North America, the group forecast a slight improvement in the construction sector, while it said most emerging markets in Latin America and Asia should remain on track for growth, and no change was expected in Africa and the Middle East.
"The sharp global rise in energy, raw material and transportation costs call for further price adjustments. This and continuous, consistent cost management are focal points at all levels of the group," the company said.