HeidelbergCement Misses Estimates as Long Winter Outweighs Cuts
HeidelbergCement AG (HEI), the world’s third-largest maker of cement, reported first-quarter profit that missed analysts’ estimates as a harsh winter depressed earnings in a slumping Europe, outweighing the impact of a savings program.
Operating profit before depreciation rose 3.3 percent to 219 million euros ($287 million), the Heidelberg, Germany-based company said in a statement. The average estimate of 10 analysts surveyed by Bloomberg was 221 million euros. Sales slipped 1.3 percent to 2.76 billion euros.
“The improved operating income in the first quarter, despite declining sales volumes and revenue, shows that we are on the right track,” Chief Executive Officer Bernd Scheifele said in the statement. “The efficiency improvement programmes are going according to plan.”
HeidelbergCement, which dates back to 1873, is pursuing 1.01 billion euros in cost savings by the end of 2013 as the demand for building materials drops in parts of Europe. The target, which was raised from an earlier goal of 600 million euros, involves 240 million euros of savings this year.
Lafarge SA (LG), the Paris-based competitor, yesterday reported first quarter Ebitda which declined 26 percent to 380 million euros, restricted by cold weather in Europe, North Africa and the U.S. It is also midway through a savings program which is intended to boost Ebitda by 1.75 billion euros by 2014.
HeidelbergCement’s net loss expanded to 184 million euros from 159 million euros last year. That was less than the 188 million-euro average loss predicted by nine analysts in a Bloomberg survey.
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