By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)- Holcim Ltd, one of the world’s leading suppliers of cement and aggregates said on Wednesday its 2015 first quarter (Q1) net income grew significantly by 111.8 percent to CHF 378 million, mainly as a result of the divestment of Holcim’s minority shareholding in Siam City Cement
The cement producer said net income attributable to shareholders of Holcim Ltd was also up markedly by 289.3 percent to CHF 310 million.
According to the firm, cash flow from operating activities improved 12.1 percent to CHF -214 million in the first quarter, “a quarter which is traditionally lower than the others,” the company added.
It reported that net financial debt over the last twelve (12) months decreased by CHF 370 million and stood at CHF 9,670 million.
“In the first quarter of 2015, the contribution of the Holcim Leadership Journey to the Group’s operating profit amounted to CHF 85 million. The Customer Excellence Stream contributed CHF 21 million and the cost initiatives CHF 64 million to this result building on the good traction in the procurement and logistics streams,” Holcim said.
The company disclosed that operating profit adjusted for merger costs of CHF 44 million was up 3.5 percent, while the adjusted operating profit margin increased to 7.7 percent.
While reported operating profit decreased by 11.5 percent to CHF 261 million, as increases in the Group regions Asia Pacific and Latin America were not able to compensate for merger costs and lower performance in Europe and in Canada, where a harsher winter was noted, the cement maker affirmed.
Bernard Fontana, CEO, said “Holcim reported robust development in the first quarter 2015, with an increase in financial performance despite a different weather pattern and some volume declines compared to a very strong previous year’s quarter. Holcim also generated higher cash flow from operating activities and increased net income significantly supported by the gain from the divestment of the Group’s minority shareholding in Siam City Cement.”
Fontana further affirmed that Holcim continued to operate in a weak global economic environment that was characterised by uncertainty and moderate growth prospects.
He noted that the development was positively impacted by lower oil prices but at the same time investment weakness more than offset these effects in both advanced and emerging markets.
The CEO at Holcim said based on its strong geographic footprint; focus on prices, disciplined cost management, and previous restructuring, Holcim was able to mitigate the adverse economic effects.
“Following the exceptionally strong first quarter 2014, cement deliveries declined as all Group regions except North America and Latin America sold less volume,” he noted.
He says in important markets including Mexico, the United States, and the Philippines more cement was sold. “Aggregate shipments increased thanks to Holcim Germany, Aggregate Industries UK, and Aggregate Industries US. Ready-mix concrete volumes were down.
