Asia Pacific helps Holcim to second quarter profits

Holcim reported second quarter sales of CHF 5,5 billion (€ 3,6 billion), down -19,7% on the CHF 6,9 billion (€ 4,5 billion) recorded for the same quarter last year. Pre-tax profits for the quarter slipped -21,5% to CHF 963 million (€ 635 million), down from CHF 1,2 billion (€ 810 million) 12 months ago.

Despite declines in Holcim's mature markets, the Asia Pacific region, and particularly India, saw strong growth. Cement sales in the region grew +3,6% in the quarter and pre-tax profit jumped +30% to CHF 354 million (€ 233 million), up from the CHF 272 million (€ 179 million) reported last year.

Africa and the Middle East also saw an increase in cement sales, up +4,3%, with pre-tax profits for the region up by +6,8% to CHF 94 million (€ 62 million), compared to CHF 88 million (€ 58 million) last year.

"Asia Pacific defied the global economic crisis and construction activity remained lively," said Rolf Soiron, Holcim chairman.

"In India particularly, high pent-up demand in the infrastructure sector and the positive development of the agricultural sector led to a rising demand for building materials."

Regarding operations in Australia, Mr Soiron said, "Despite a decline in demand, Holcim will continue with its CHF 1,8 billion (€ 1,2 billion) acquisition of Cemex Australia, which will include a 25% interest in Cement Australia. This acquisition is currently awaiting approval from the Australian authorities and we expect the transaction to be completed in the second half of this year."

Outlook

Looking forwards, a Holcim statement said that in the first half of 2009, there had been no sign of an economic turnaround. As such, markets such as the US, the UK, Spain and Eastern Europe are expected to remain challenging.

The company expects further growth in Asia, while Latin America and Africa and the Middle East are also expected to follow a favourable trend.

"On balance, Holcim's strong footprint in the emerging markets partially offsets the negative development in our mature markets," said Mr Soiron. "In Europe and North America, the government stimulus programmes will have a positive impact on demand, building up gradually over the next year."