Holcim’s 2013 net income jumps 59%

Cement producer Holcim has reported a 59% year-on-year increase in net income to CHF1.6 billion (€1.3 billion) for 2013, despite a 6.8% drop in revenues to CHF19.7 billion (€16.1 billion) for the period.

The company said the turnaround was down to its two-year cost-cutting and restructuring strategy, known as the 2012 to 2014 Holcim Leadership Journey. But it said revenues for 2013 had been hit by currency fluctuations and a general difficulty in introducing price increases for its products.

Holcim CEO Bernard Fontana said, “Despite difficult market conditions, as a result of which volumes in all three segments were below those recorded last year, the operating EBITDA margin and net income increased due to the consistent implementation of the Holcim Leadership Journey.”

In 2013, Holcim achieved cement sales of 138.9 million tonnes, compared to 142.3 tonnes in the previous year. It said the 2.4% fall was mainly attributable to lower volumes in its Asia Pacific business, while cement sales in Europe were higher mainly as a result of the sustained high demand from Russia and Azerbaijan.

Meanwhile, it said aggregates volumes contracted 2.4% in 2013 to 154.5 million tonnes. Holcim said demand for crushed stone, gravel and sand was higher in North America due to positive market development in the US. In Asia Pacific, it said volumes fell mainly on account of lower demand in Australia, while in Latin America, the restructuring of its aggregates activities resulted in a more pronounced fall in volumes.

Deliveries of ready-mixed concrete were also hit by Holcim’s restructuring activities, falling 12.9% year-on-year to 39.5 million m³ for 2013. Asphalt sales were hit by lower demand in Canada and the US, while sales in the UK were higher, according to the company.

2014 outlook

For 2014, Holcim said it expected global economies to show another year of uneven performance. Nevertheless, it forecast cement volumes to increase in all of its regions in 2014.

It said aggregates volumes were expected to remain flat overall this year as increases in Asia Pacific, Europe, North America, and Africa/Middle East are offset by negative volumes in Latin America. In ready-mixed concrete, it said volumes were also expected to increase in most regions with the exception of Europe and Latin America.