Weaker than expected global growth hits Holcim

Cement producer Holcim has blamed weaker than expected global economic growth for a decrease in sales and operating profit in the first six months of the year.

First half revenues totalled €7.85 billion, down 7% year-on-year, while operating profit slipped 5.2% compared to the first six months of 2012 to €851 million. The company’s annual cement production capacity was also down 1.4% to 206.4 million tonnes.

Holcim said construction activity was hurt by severe winters around the world, as well as the bad weather encountered in many regions. It said demand fell short of expectations in India, Canada, Mexico and Morocco in particular. By contrast, it said the economic climate was significantly better in the Philippines and Ecuador, while it reported improvements in Europe and Latin America.

For the full-year, Holcim said it expected to record an increase in cement sales, but it said revenues from its aggregates and ready-mixed concrete businesses were not expected to reach 2012’s levels.

It said while its Asia Pacific and Latin America businesses were expected to record higher cement sales, it was less optimistic with regard to Europe, Africa and the Middle East. In North America, it said cement sales were expected to reach similar levels to the previous year.

Holcim added that it expected to see an improvement in its operating margin and operating profit for the full-year, thanks in part to a group-wide cost savings programme.