Holcim sees gradual recovery

Holcim’s revenues for the first half of the year came to CHF 9.06 billion (US$ 9.99 billion), a -6.1% decline on last year. However, the company said much of the downturn was linked to currency effects, adding that on a like-for-like business its sales were up +4.8%.

Indeed, Holcim’s cement sales for the first half of the year were up +2% to 70 million tonnes, which the company said was due to growth in North America, Europe, Africa and the Middle East. The company’s aggregates sales were up +0.2% to 69.6 million tonnes, which it said was due to growth in North America and Asia-Pacific.

However, ready-mixed concrete volumes were down -3.9% to 18.1 million m3, with growth in parts of Europe not enough to offset declines in Latin America. Asphalt volumes increased +21.8% to 4.1 million tonnes.

Holcim CEO Bernard Fontana said, “Holcim increased sales of both cement and aggregates in the first half of 2014, despite an uneven development of the global economy. Group regions North America, Africa Middle East, and Europe recorded particularly strong cement sales. Mild weather conditions at the beginning of the year supported building activity, especially in Europe where the Group continued to restructure activities in 2014. In Asia the market situation stabilised, and as a result ACC and Ambuja Cements in India, Holcim’s largest Group companies in the region, were able to increase cement sales."

The net profit for the first half was down -13.5% on last year to CHF 657 million (US$ 724 million). Holcim said this was partly due to a one-off gain in the 2013 figures.

Outlook

Holcim said it expects mixed performance from the global economy this year. Construction markets in Europe are thought to have reached the bottom with slow recovery in sight. At the same time, it expects North American markets to continue to recover, especially in the US. Latin America on the other hand could continue to face uncertainties in Argentina but should overall show slight growth in 2014. The Asia Pacific region is expected to grow although at a comparatively slower pace than experienced in recent years. Africa and the Middle East is expected to gradually improve.

This is expected to translate into increased cement volumes in all regions of the world for Holcim this year, while aggregates volumes will remain flat overall due to a downturn in Latin America balanced by growth elsewhere.