HeidelbergCement Beats Analyst Estimates on Pricing
HeidelbergCement AG, the world’s third-largest maker of cement, reported fourth-quarter profit and sales that beat analysts’ estimates as growth in North America, higher prices and cost-cuts offset weakness in Europe.
Operating profit before depreciation rose 8.2 percent to 691 million euros ($934 million), the Heidelberg, Germany-based company said in a statement today. The average estimate of 11 analysts in a Bloomberg survey was 644 million euros. Sales jumped 6.5 percent to 3.5 billion euros, versus an estimated 3.42 billion euros.
As the demand for building materials declines in parts of Europe, HeidelbergCement is pursuing 600 million euros in cost- savings by the end of 2013. Reduced government spending in Europe meant annual sales declined 2.8 percent to 4.2 billion euros in the north and west of the continent, the company said.
After beating its cuts target of 200 million euros last year, making 384 million euros in efficiency savings, the company has now raised the 2013 goal to 1.01 billion euros. It’s also tackling a debt burden inflated by the 2007 takeover of Hanson for more than $18 billion.
Full-year operating income before depreciation increased 6.7 percent to 2.5 billion euros, with revenue growing 8.7 percent to 14 billion euros.
“We are pleased that we achieved our goal of increasing revenue and operating income, despite the negative impact of the euro crisis on many countries in Europe,” Chief Executive Officer Bernd Scheifele said in the statement. “Due to the continuing strong economic growth in the emerging markets and the recovery in the U.S., we are cautiously confident for the future.”
HeidelbergCement attributed the sales decline in western and northern Europe to lowered government spending on infrastructure. While operating profit declined 21 percent to 577 million euros in the region, it grew 22 percent to 577 million euros in North America, 25 percent to 887 million euros in the Asia-Pacific region and 24 percent to 203 million euros in the Africa and Mediterranean basin region.
Scheifele said in November the company was targeting higher revenue and operating profit for 2012, without being more specific.
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