Holcim positive on U.S. demand after Q1 profit beat
Reuters
Published Apr 25, 2024 05:15AM ET
By John Revill
ZURICH (Reuters) -Holcim expects strong demand in North America to continue this year, the building materials and cement maker said on Thursday, after beating first-quarter profit forecasts.
"In North America we had a few less invoicing days and we had some strong winter effects, so nothing to worry about," CEO Jan Jenisch told reporters.
"The business is in a super strong position, we expect a record second quarter of the year," he added. "You will see a lot of growth going forward this year."
The Swiss company is planning to separate and spin off its North America business next year. In the first quarter to end-March the region saw a 0.3% dip in local currency sales.
Holcim (SIX:HOLN) is benefiting from the reindustrialisation trend in the United States, Jenisch said.
Overall Holcim's sales fell 2.4% to 5.59 billion Swiss francs ($6.12 billion), in line with forecasts, while a strong Swiss franc reduced reported sales by 332 million francs.
On a local currency basis, sales rose 3.4%, while profitability improved, due to higher sales at its products and solutions business, which makes mortars, flooring and roofing systems.
It posted a 7.8% rise in recurring operating profit (EBIT) to 532 million Swiss francs , beating the 501 million expected by analysts.
Jenisch said Holcim was doing well with its low carbon cements, which are more profitable.
"Our new billionaire brands of EcoPlanet, EcoPact...are in super high demand," he said.
The company confirmed its full-year outlook which calls for an increase in currency adjusted sales of 4% with an extra 2% in sales growth from acquisitions.
During the quarter Holcim bought five small businesses in Europe, central and south America, while completing its exit from Uganda, Tanzania, South Africa and Russia.
Holcim said it was also still aiming to increase its operating profit margin to 18%. It said its profit margin improved by 90 basis points n the first quarter but provided no figure for the level reached.
($1 = 0.9144 Swiss francs)
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Written By: Reuters
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