Building materials company Holcim forecasts 'robust' growth
Reuters
Published Jul 27, 2023 05:54
Updated Jul 27, 2023 07:41
By John Revill
ZURICH (Reuters) -Holcim expects demand for building materials to remain robust this year, the world's biggest cement maker said on Thursday after posting better than forecast sales and profit.
The Swiss company, a bellwether for the wider construction sector, shrugged off concern over a slowdown linked to rising global interest rates.
The U.S. Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday, citing elevated inflation as a rationale for what is now the highest U.S. central bank policy rate in 16 years.
Other central banks have also been raising rates and concerns have been raised about sluggish economic growth in China weighing on the global economy.
Holcim (SIX:HOLN), however, gave a confident outlook for the rest of the year as it continues a shift in focus towards North America and Europe and away from Asia.
"Holcim expects demand across its markets to remain robust and to continue profitable growth," the company said.
The company, which makes mortar and roofing products as well as cement, said sales fell 10.9% to 7.34 billion Swiss francs ($8.53 billion) in the three months to June 30.
Much of the decline had been expected, reflecting the sale of Holcim's India business last year as well as unfavorable currency movements including the stronger Swiss franc.
Analysts forecasts compiled by the company had predicted sales of 7.23 billion francs.
On an organic basis, ignoring the impact of currency movements and divestments, the building materials group's sales rose 7% in the quarter.
Holcim's recurring operating profit fell 0.6% to 1.55 billion francs, beating analyst expectations of 1.45 billion francs. Organically, the measure was up 14% year on year.
The company confirmed its full year outlook, still aiming for a more than 6% organic increase in sales.
In another confident note for construction, Heidelberg Materials raised its operating profit outlook when it reported results on Thursday.
($1 = 0.8603 Swiss francs)
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Written By: Reuters
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