Reuters logo
UPDATE 2-HeidelbergCement targets price increases after weak Q4
February 14, 2017 / 6:53 AM / 9 months ago

UPDATE 2-HeidelbergCement targets price increases after weak Q4

* Bad weather, weak Indonesia blamed for Q4 sales slide

* Italcementi synergies, cost inflation in focus in 2017

* Shares indicated down 2.8 pct (Adds share indication, details on regional outlook, rivals, trader comment)

By Georgina Prodhan

FRANKFURT, Feb 14 (Reuters) - HeidelbergCement said it would focus this year on realising the benefits from the acquisition of Italcementi and on raising prices to combat cost inflation after a patchy fourth quarter that missed market expectations.

The company, which reinforced its position among the world’s top three building-materials suppliers with its Italcementi deal last year, blamed bad weather and a weak Indonesian market for a 4 percent slide in quarterly sales.

HeidelbergCement shares were indicated down 2.8 percent ahead of the Frankfurt market open, at the bottom of the blue-chip DAX. “Figures should trigger profit-taking,” a Frankfurt trader said.

Quarterly pro-forma revenue, including Italcementi contributions for the full years 2015 and 2016, fell to 4.24 billion euros ($4.5 billion), below the average estimate of 4.5 billion euros in a Reuters poll.

Operating income before depreciation (OIBD) rose 2 percent on a like-for-like basis to 818 million euros, HeidelbergCement said on Tuesday, also below the poll average, which was 847 million euros.

Western Europe, the group’s biggest revenue source, was the only region to show growth, thanks to a strong German economy, housing and infrastructure projects in Britain and a Dutch turnaround. North America was hit by an early start to winter.

“In 2017, we will focus on the realisation of the synergies from the Italcementi acquisition and on measures in view of cost inflation. Price increases will play an important role in this context,” Chief Executive Bernd Scheifele said in a statement.

“HeidelbergCement is very well equipped to follow up on the new strategic priorities - growth and increase in shareholder return - over the coming years.”

The company is due to present detailed financial results and a 2017 outlook on March 16.

HeidelbergCement said it foresaw a further decline in demand and an increase in excess capacities in China, although it did not expect this to lead to a significant increase in Chinese exports since most capacity is located inland.

It said it expected a stronger economic recovery in North America this year, continuing improvement in Britain and increasing infrastructure investments in Indonesia - which have been delayed.

Mexican rival Cemex last week forecast sales volume growth of up to 3 percent this year. Its shares have rallied on hopes it could benefit from U.S. President Donald Trump’s plan to build a wall along the U.S.-Mexican border.

Lafargeholcim, the world’s biggest cement maker, is due to report 2016 results on March 2. ($1 = 0.9415 euros) (Reporting by Georgina Prodhan; Editing by Gopakumar Warrier and Jane Merriman)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below