Holcim Predicts Improved 2014 as Sales Miss on Currency SwingsPatrick Winters
Holcim Ltd. forecast improved cement shipments this year as the start of a recovery in Europe helps offset the currency costs and weaker emerging markets that weighed on fourth-quarter revenue.
Net income in the three months through December totaled 233 million Swiss francs ($263 million), in line with estimates. Sales declined 9 percent to 4.8 billion francs, short of 5 billion-franc average estimate in the Bloomberg survey as devaluing emerging market currencies crimped sales.
“For 2014, Holcim expects the global economies to show another year of uneven performance,” the company said in a statement. “Construction markets in Europe are expected to have reached the bottom with slow recovery in sight.”
Any improvement in the pace of European building projects will be a bonus for Chief Executive Officer Bernard Fontana, who is two years into the job and needs to show he can execute on an efficiency program he began in 2012 that’s now entering its final and most intensive year. Fontana has been closing cement plants as well as trading assets with competitors to offset a slump in European construction.
Paris-based Rival Lafarge SA, the world’s second-largest cement maker, reported earnings last week that beat analyst estimates and predicted rising demand for cement in its markets, while next biggest cement maker Heidelberg Cement AG’s profit missed estimates earlier this month as a stronger Euro crimped emerging market sales.
Holcim forecast growth in cement demand in the Asia Pacific region will slow. Lower sales in India, Holcim’s largest market, as well as Mexico and Canada, were the reason for the Jona, Switzerland-based company cutting a full-year sales forecast in November.
The building-materials supplier proposed a dividend of 1.30 francs per share.