Emerging markets lift cement maker Holcim result

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ZURICH, Nov 7 (Reuters) World number-one cement maker Holcim beat forecasts with more than doubled nine-months profit thanks to a one-off gain and emerging market demand and gave an upbeat full-year outlook.

Net profit rose to 3.3 billion Swiss francs ( ZURICH, Nov 7 (Reuters) World number-one cement maker Holcim beat forecasts with more than doubled nine-months profit thanks to a one-off gain and emerging market demand and gave an upbeat full-year outlook.

Net profit rose to 3.3 billion Swiss francs ($2.89 billion), compared with the average expectation of 3.075 billion francs in a Reuters poll of 12 analysts.

The group, which competes with France's Lafarge, said it expected to ''clearly'' exceed its long-term growth target of 5 percent in internal operating EBITDA (earnings before interest, taxes, depreciation and amortisation) in 2007 -- its own benchmark for core profit.

''Despite a slowdown in some markets (not a surprise), Holcim confirms its expectations of achieving an excellent result and attractive organic growth,'' Landsbanki Kepler analyst Josep Pujal said in a note.

Holcim shares rose 3.8 percent to 134.10 francs in early trading, before paring gains to 131.10 francs.

Recent acquisitions and a programme to expand capacity and boost efficiency will boost growth, Holcim said.

''Holcim is coping well with the slowdown in North America, and better than other competitors,'' Zuercher Kantonalbank analyst Martin Huesler said.

In October, Mexican rival Cemex blamed the U.S housing downturn for a drop in sales in its largest market.

Holcim shares were indicated up slightly in the pre-market.

North American net sales fell 2.3 percent and Holcim said the situation in the U.S real estate market remained difficult, but weakness in the sector had been offset by infrastructure work and orders for industrial and commercial buildings.

Holcim, which sells cement, gravel and sand as well as aggregates, asphalt and ready-mixed concrete, has benefited from growth in the global economy and its broad geographical spread, including in emerging markets.

Operating profit rose 20.7 percent to 4 billion francs on sales up 15.8 percent at 20.3 billion francs, helped by strong demand in emerging markets through rapidly growing cities, housing shortages and infrastructure expansion.

Internal operating EBITDA growth was 13.1 percent, Holcim said. The company booked a capital gain of 1.1 billion francs through the sale of a stake in its South Africa unit.

Net sales in Europe rose 23.3 percent and growth continued in eastern Europe, with demand particularly dynamic in southeastern Europe and in Russia, the group said.

Holcim is trading at 13 times expected 2008 earnings, a premium to Lafarge which is trading at 10.4 times and Mexico's Cemex, which is trading at nearly nine times, according to Reuters data.

REUTERS BJR DS1552 .89 billion), compared with the average expectation of 3.075 billion francs in a Reuters poll of 12 analysts.

The group, which competes with France's Lafarge, said it expected to ''clearly'' exceed its long-term growth target of 5 percent in internal operating EBITDA (earnings before interest, taxes, depreciation and amortisation) in 2007 -- its own benchmark for core profit.

''Despite a slowdown in some markets (not a surprise), Holcim confirms its expectations of achieving an excellent result and attractive organic growth,'' Landsbanki Kepler analyst Josep Pujal said in a note.

Holcim shares rose 3.8 percent to 134.10 francs in early trading, before paring gains to 131.10 francs.

Recent acquisitions and a programme to expand capacity and boost efficiency will boost growth, Holcim said.

''Holcim is coping well with the slowdown in North America, and better than other competitors,'' Zuercher Kantonalbank analyst Martin Huesler said.

In October, Mexican rival Cemex blamed the U.S housing downturn for a drop in sales in its largest market.

Holcim shares were indicated up slightly in the pre-market.

North American net sales fell 2.3 percent and Holcim said the situation in the U.S real estate market remained difficult, but weakness in the sector had been offset by infrastructure work and orders for industrial and commercial buildings.

Holcim, which sells cement, gravel and sand as well as aggregates, asphalt and ready-mixed concrete, has benefited from growth in the global economy and its broad geographical spread, including in emerging markets.

Operating profit rose 20.7 percent to 4 billion francs on sales up 15.8 percent at 20.3 billion francs, helped by strong demand in emerging markets through rapidly growing cities, housing shortages and infrastructure expansion.

Internal operating EBITDA growth was 13.1 percent, Holcim said. The company booked a capital gain of 1.1 billion francs through the sale of a stake in its South Africa unit.

Net sales in Europe rose 23.3 percent and growth continued in eastern Europe, with demand particularly dynamic in southeastern Europe and in Russia, the group said.

Holcim is trading at 13 times expected 2008 earnings, a premium to Lafarge which is trading at 10.4 times and Mexico's Cemex, which is trading at nearly nine times, according to Reuters data.

REUTERS BJR DS1552

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