Holcim Loss Exceeds Estimates, Weighed Down by Overhaul
Holcim Ltd. (HOLN), the world’s largest cement-maker, reported a bigger-than-estimated loss in the fourth quarter on restructuring charges and said it’s become less optimistic about European markets.
The loss narrowed to 161 million francs ($172.7 million) from a 438 million-franc loss a year earlier, the company said. Analysts predicted a loss of 79.3 million francs. Sales rose 1.2 percent to 5.4 billion francs, compared with a 5.5 billion-franc prediction.
Chief Executive Officer Bernard Fontana is in the midst of overhauling Holcim’s European business as a construction slump erodes demand for cement. Holcim said in December it is accelerating a program to deal with underperforming European plants as peers from France’s Lafarge SA (LG) to Mexico’s Cemex SAB de CV (CEMEXCPO) sell assets to cut debt acquired in pre-crisis takeovers.
Cash restructuring costs of 181 million francs and 457 million francs in asset write-offs hurt fourth-quarter results as Holcim adjusted capacity from Belgium to Italy. The Jona- based cement-maker said in December it would book a 410-million- franc charge for writedowns on property, plants and equipment related to a European re-structuring.
Rival Lafarge SA reported earnings last week that beat analyst estimates as sales rose in Asia and Latin America. HeidelbergCement AG (HEI) also beat predictions. Holcim’s restructuring costs for the 2012 full-year increased 50 percent from a year earlier to 1 billion francs, the Swiss company said.
Holcim forecast a significant growth in operating profit in 2013 on rising cement sales in Asia, North America and Latin America and as efficiency improvements from a savings program begun by Fontana last year gain momentum.
Holcim, which has promised to save 1.5 billion francs with efficiency gains in areas like procurement and logistics by 2014, raised 375 million francs in December through asset sales in Thailand and Guatemala.
The company proposed a dividend of 1.15 francs a share, beating the 1.10 franc estimate of analysts in Bloomberg data. Shares in Holcim fell 0.4 percent to 71.65 francs at 10 a.m. in Zurich. Volume traded was 77 percent of the three month daily average, according to data compiled by Bloomberg.
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