Holcim Ltd. Chief Executive Officer Bernard Fontana said there will be no repeat of the European writedowns that caused the bigger-than-estimated quarterly loss at the world’s largest cement maker.
“We have done our write-offs,” Fontana told reporters at a press conference in Zurich.
After accelerating an overhaul of European operations, the focus is shifting to “stabilizing the situation” and improving results with a lower cost base, according to Chief Financial Officer Thomas Aebischer. Holcim had a fourth-quarter net loss of 161 million francs ($172.7 million), double analysts’ average estimate.
Fontana aims to cut European cement capacity by 10 percent and is closing plants as a construction slump erodes demand. Holcim said in December it is accelerating a program to deal with underperforming European plants as peers from France’s Lafarge SA to Mexico’s Cemex SAB de CV sell assets to cut debt acquired in pre-crisis takeovers.
Kepler Capital Markets analyst Josep Pujal said he was a “little disappointed” with the quarterly results.
Shares in Holcim rose 1.9 percent to 73.25 francs as of 3:11 p.m. in Zurich, reversing earlier declines. Trading volumes were about 62 percent more than the three-month daily average, according to data compiled by Bloomberg.
Sales rose 1.2 percent to 5.35 billion francs, compared with a 5.52 billion-franc estimate in a survey of analysts by Bloomberg.
Cash restructuring costs of 181 million francs and 457 million francs in asset writedowns hurt 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 restructuring.
Rival Lafarge SA reported earnings last week that beat analyst estimates as sales rose in Asia and Latin America. HeidelbergCement AG 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’s strong debt reduction and upbeat outlook for profitability remained positive points in today’s results, Kepler’s Pujal said.
The cement-maker forecast “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 will focus resources on optimizing its cement positions in India, Indonesia and the U.S. rather than moving into new markets, Aebischer said.
“We are not open to putting up a flag everywhere for Holcim,” he said.
Holcim, which has promised to save 1.5 billion francs with efficiency gains in areas such as 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 data compiled by Bloomberg.