Holcim results outstrip forecasts

Growing global demand for construction materials boosted Holcim's sales Keystone

Holcim, the world’s number two cement producer, has increased its net profit by a third to SFr914 million ($784 million), outstripping market forecasts.

This content was published on March 2, 2005 minutes

The firm attributed the improved annual result to "solid" internal growth and a global upsurge in construction activity, leading to increased demand for concrete, cement and aggregates.

Net sales rose by nearly five per cent to SFr13.22 billion, with sales volumes increasing across all regions and business segments.

Operating profit on sales (earnings before interest and tax or EBIT) also increased by 16.9 per cent, to reach SFr2.25 billion.

The highest increase in operating profit was seen in the European market – up 37.3 per cent to SFr662 million.

In the United States, increased demand led to Holcim plants working at full capacity. Operating profit surged by 19 per cent to SFr325 million.

Holcim said there was also significant growth in the Africa/Middle East region, with operating profit reaching SFr370 million (up 28.9 per cent).

The company said the gross dividend would go up by SFr0.10, taking it to SFr1.25.

Solid demand

Holcim said it was confident that 2005 would also be a solid year, with growing indications of a global economic recovery.

It said in a statement that demand for its products should continue to be high, given the "robust state of the construction sector".

Holcim added that it would "take further steps to increase efficiency in the group".

The firm is also about to boost its global presence through a new acquisition in Britain and a joint venture in India.

In January the Swiss giant agreed to buy the British company, Aggregate Industries, for £1.8 billion (SFr4 billion).

Holcim announced at the same time that it was entering into a joint venture with India’s Gujarat Ambu Cements, helping it to secure its position in the world’s second largest market for cement.


Key facts

Holcim is the world’s second largest cement producer.
It produced 154.1 million tonnes of cement in 2004.
Its products include cement, concrete and aggregates (sand, gravel and ready-mixed cement).

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In brief

Holcim’s net profit in 2004 was up 33.2 per cent to SFr914 million.

Operating profit increased by 16.9 per cent to SFr2.25 billion.

The improved results were largely due to a global increase in construction activity.

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