HeidelbergCement Saves More Than Targeted, Cuts Debt by 10%
HeidelbergCement AG (HEI), the world’s third-largest maker of cement, saved more than it expected from a cost-cutting program and cut debt by almost 10 percent in the quarter.
Net debt fell 740 million euros ($944 million) to 7.76 billion euros, the Heidelberg, Germany-based company said today in an e-mail. The cement maker also saved 241 million euros, more than the targeted 200 million euros, by reducing the cash tied up in day-to-day business and cutting purchasing expenses. The stock rose the most in two months in Frankfurt trading.
Chief Executive Officer Bernd Scheifele today said he will find a further 350 million euros in savings by 2015 as he attempts to counter declining demand for building materials in parts of Europe. The company is struggling to overcome a debt burden, inflated by the 2007 takeover of Hanson for more than $18 billion.
“Net debt reduction in the third quarter underlines that we are well on our way to reach our targets for 2012,” Scheifele said in today’s statement. “However, macroeconomic risks remain meaningful.”
The shares climbed as much as 1.91 euros, or 4.6 percent, the biggest jump since Sept. 6, to 43.74 euros. They were trading up 2.8 percent at 43 euros as of 9:23 a.m. local time. The stock has gained 31 percent this year for a market value of 8 billion euros.
Third-quarter earnings before interest and taxes, depreciation and amortization rose 12 percent to 874 million euros, beating the average estimate for 831.8 million euros in a Bloomberg survey. Sales rose 9 percent to 3.9 billion euros.
Scheifele stuck to a goal for higher revenue and operating profit this year, without being more specific.
Holcim Ltd. (HOLN) yesterday reported an 11 percent rise in third- quarter profit as it pushed through price increases in emerging markets, and said it is considering disposals amid a greater- than-expected slowdown in Europe. Lafarge SA (LG) will report third- quarter results tomorrow.
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