Holcim Profit Falls on Higher Energy Costs
Operating profit fell 12 percent to 669 million francs ($747 million), the Jona, Switzerland-based company said in a statement today. That compares with an average estimate for 673 million francs in a Bloomberg survey. Sales declined 6.1 percent to 5.32 billion francs, a fifth consecutive quarterly decline, ahead of an estimate for 5.27 billion francs.
The company today reiterated a forecast for operating profit on a comparable basis this year to “be close” to last year’s results. While Holcim expects its markets in Latin America to expand and observes “brisk” construction in Asia- Pacific, it forecasts building in North America to improve only “slightly.”
"Profitability is a bit of a challenge," said Tim Cahill, an analyst at J&E Davy Holdings Ltd. "The key for Holcim, and all cement makers, will be their ability to push through more price increases next year."
Chief Executive Officer Markus Akermann is fighting higher fuel costs and the appreciation of the franc as the European debt crisis slows global construction. Holcim’s sales in North America fell 7.9 percent, while revenue fell 12 percent in Europe.
The appreciation of the franc reduced sales and operating profit by 15 percent. Higher costs could not completely be passed on to sales prices, Holcim said. Net income declined 35 percent to 356 million francs, missing the 373.3 million-franc average estimate of seven analysts surveyed by Bloomberg.
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