Charges and currencies hit Holcim
By Chris Sleight29 February 2012
Holcim's sales for 2011 fell -4.2% on the previous year to CHF 20.7 billion (US$ 23.1 billion), although the company says that on a like-for-like basis it saw a +7.5% increase in revenues. However, net profits more than halved to CHF 1.62 billion (US$ 1.81 billion) due to several extraordinary charges announced earlier this year. Operating profits (before these charges) were level on a like-for-like basis with 2010.
Holcim says the reason for its revenue decrease was the strength of the Swiss Franc last year. It says that without these pressures its revenues would have exceeded CHF 23 billion (US$ 25.5 billion), rather than the CHF 20.7 billion (US$ 23.1 billion) reported.
Testament to this si the increase in sales of materials the company saw last year. Cement sales were up +5.6% to 144.3 million tonnes, while aggregate sales were up +9.6% to 173 million tonnes and the volume of ready-mixed concrete increased +5.4% to 48.4 million m3. Holcim did however see a -2.8% fall in asphalt sales, to 19.3 million tonnes.
Holcim added that sales of materials increased in four of the five regions around the world it operates in. Only the Africa/Middle East region saw a decline.
According to Holcim, most of the increases in demand it has seen have come from emerging markets and it is increasing its capacity in these regions accordingly. Last year it opened new cement plants in both Russia and Azerbaijan. It also added capacity in Ecuador to serve Latin America, while in India, its affiliate ACC began operating what Holcim claims is the largest clinker kiln in the world.
However, Holcim says the rise in demand has been accompanied by an increase in costs. It says raw materials, energy and transport costs all rose last year.