Holcim operating profits reduced
04 November 2014
Third quarter results from Holcim have shown the Swiss-based company posted a year-on-year 4.4% reduction in group operating profit.
The construction firm’s figures of CHF 1.72 billon for January to September were attributed to weak emerging market currencies and an “ongoing challenging environment.”
However, its CEO Bernard Fontana has remained upbeat about its financial performance, citing a reported like-for-like increase of 2.8% in its operating figures for 2014 (stripping out the financial effects of expansion and acquisitions).
He said, “Holcim posted a solid like-for-like performance in the first nine months of 2014 building on the good traction earlier in the year, despite the ongoing challenging market environment.
“The Group increased like-for-like operating profit on the back of the solid financial performance in North America, Europe, and Africa Middle East. However, weak emerging market currencies continued to negatively impact consolidated financial performance, in particular in Asia Pacific and Latin America.”
According to the company, its “balanced geographic footprint” had enabled it to mitigate a mixed picture on its global performance. Its US operations were among its strongest, with operating profit up 47% to CHF 215 million.
In its third-quarter results, the company said its like-for-like operating EBITDA increased due to Group presence in the UK, US and performance of Ambuja Cements in India and Russia. It also stated that its focus on pricing within the US, Mexico and India had produced strong results.
Despite this, Holcim said that while the global construction sector had continued to show signs of recovery this year, it had done so at a much slower rate than had been forecast.
The group has incurred restructuring and operating costs of CHF 91 million as it prepares for its merger with Lafarge – which would make it the largest cement business in the world.
It described initial discussions with the European Commission over the move as having been “constructive,” as the company prepares to sell-off assets to ensure the deal is approved by regulators.