The world's second largest cement maker, Holcim, nearly tripled first-half net profit, boosted by the sale of a stake in a South Africa unit.This content was published on August 23, 2007 - 10:48
The Swiss company said on Thursday that net profit rose to SFr2.4 billion ($1.99 billion), beating analysts expectations. It also announced that it would bid for another 20 per cent in India's Ambuja Cements.
"Factors which contributed to [the results] were the favorable market environment, the successful integration of acquisitions and a further improvement in operating efficiency," the Zurich based firm said in a statement.
Holcim added that cement sales rose by 13.3 per cent to 74.2 million tons, with the most significant volume growth attributable to new consolidations in the Asia Pacific region.
At the beginning of June 2007, the company sold 85 percent of its 54 per cent stake in Holcim South Africa to a consortium which satisfies the Pretoria government's Black Economic Empowerment requirements.
The sale resulted in a capital gain of SFr1.11 billion. Additionally, a special dividend of SFr150 million was received from South Africa, which led to an above-average increase in consolidated profit of 162.7 percent to SFr2.86 billion.
"Another set of shining results," said Bank Wegelin. "It is especially pleasing that [figures from] North America are only showing a drop of 0.8 per cent, despite a real-estate crisis."
Analysts polled by the Reuters news agency had only forecast a net profit of SFr1.09 billion. However, this did not take into account the one-off gain from the South Africa sale.
Holcim shares had risen 0.8 per cent to SFr122.7 at the close of trading on the Swiss stock exchange on Thursday.
In a separate announcement, Holcim said it would launch a public takeover offer for another 20 per cent of the share capital of Ambuja Cements in a bid worth around $1.12 billion.
In July, the Swiss company said it was successful in its bid to take over the minority shares in Canada's St Lawrence Cement Group in a deal worth SFr778 million.
swissinfo with agencies
Holcim first-half figures:
Sales SFr13,002 billion (+19.5% compared with comparable period in 2006)
Operating profit: SFr3.324 billion (22.3%)
Net profit: SFr:2.858 billion (+162.7%)
The company was founded in Holderbank, a village between Zurich and Basel, in 1912 and has become the world's second-largest cement producer.
It realised very early on that the domestic market could offer only limited opportunity for growth and by the early 1920s it was investing in businesses in other European countries.
Expansion followed overseas and particularly in the 1950s and 60s, it built up a network of holdings in North and Latin America.
Further ventures followed in the emerging markets of Asia-Pacific in the 1970s.
In the 1980s, Holcim continue to grow in new markets, including eastern Europe. This was followed in the 1990s by further expansion in Asia.
The company changed its name from Holderbank to Holcim in May 2001.
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