Heidelberg Cement sees demand increase

Heidelberg Cement reported second quarter sales of € 3,2 billion, up +9,4% on the € 3 billion recorded 12 months ago.

Net profit for the second quarter of € 166 million, down -54% on the € 364 million recorded last year, reflected a € 101 million restructuring and refinancing cost. Last year's second quarter profit was also boosted by income associated with the sales of shares in the company's Indonesian joint venture Indocement.

A statement said that while the first quarter had been characterised by economic factors and a long period of wintery weather, demand for the company's building materials recovered significantly in the second quarter.

A spokesperson said, "Sustained growth in Asia-Pacific and Africa, as well as recovering markets in North America and Western and Northern Europe outweighed declines in the Group's Eastern Europe and Central Asia region."

During the second quarter sales volumes of cement and clinker rose +1,2% to 21,9 million tonnes, up from 21,6 million tonnes last year. "The biggest contribution was made by the Asia-Pacific region followed by North America and the Africa-Mediterranean Basin," said the spokesperson.

In Asia, Heidelberg Cement benefitted from its strong position in Indonesia, while activity in North America was driven by demand from Canada and the northern part of the US.

The spokesperson said, "While volumes in Eastern Europe and Central Asia experienced a decline again, although at a slower rate, sales in western and Northern Europe almost reached last year's levels."

Heidelberg Cement chairman Dr Bernd Scheifele said, "As a result of the improved development in our core markets and the successful continuation of our 'FitnessPlus 2010' cost-saving programmes, we were able to increase our turnover and operating income in the second quarter.

"In addition, we further strengthened our liquidity and maturity profile. Our 'FitnessPlus 2010' programme continues to be on track and generated savings of € 124 million in the first half of the year," he said.

Dr Scheifele said that while demand in the second quarter had improved, uncertainties still remain over future developments because of the high level of unemployment and the still unclear impact of budgetary consolidation on infrastructure in individual countries.

"We will continue with our cost saving programme and keep working towards our savings goal of € 300 million for 2010. Debt reduction remains an important area of focus," he said.

Heidelberg Cement will at the same time continue with targeted investments in future growth, particularly in cement activities, in the emerging countries of Asia, Africa and Eastern Europe.

"With improved cost structures, our operational strength and leading market position, we believe we are well-equipped to benefit to an above average degree form an economic upturn in the course of this year and next," said Dr Scheifele.