HeidelbergCement AG, the world's largest maker of aggregates used to produce concrete and asphalt, said sales rose for the first time in six quarters as a rebound in the global economy revived demand.
Sales in the quarter ended June 30 rose 9.5 percent to 3.3 billion euros ($4.3 billion), while operating profit rose 9.1 percent to 693 million euros, beating the mean estimates of 3.15 billion euros for sales and 673.8 million euros for profit in a Bloomberg survey.
"Demand for our building materials noticeably improved in the second quarter," Chief Executive Officer Bernd Scheifele said in an e-mailed statement today. Sales volumes for its main products, cement, aggregates, and ready-mix concrete, all rose in the quarter.
The company gave no forecast, only stating it plans to benefit over proportionally from the economic recovery this year and next. The recovery's strength and the impact of budget- deficit reduction on infrastructure spending are still unclear, the CEO said. Rival Lafarge SA today cut its outlook for cement demand in the company¡¯s markets in 2010.
Scheifele remains focused on cutting costs and debt, while completing a four-year, 20 million metric-ton expansion of production capacity in countries such as Poland and Russia by 2012. He widened his 2010 cost-cutting target by 50 percent to 300 million euros in February after financing and other costs slashed profit 98 percent last year. The company said today it achieved 124 million euros of the cost-cutting goal by June 30.
The company cut 3,239 jobs, or 5.7 percent of its workforce, in the 12 months through June.
Profit Falls
Second-quarter net income for the Heidelberg, Germany-based company fell 64 percent to 120 million euros, as a year earlier it had a gain from selling a stake in Indonesia's second-largest cement maker as well as a tax gain. Net income trailed the mean estimate of 207.7 million euros in the Bloomberg survey.
Net debt at June 30 was 9.07 billion euros, up from 8.96 billion euros on March 31.
Cemex SAB of Mexico, the largest cement maker in the Americas, posted a loss on July 27 for a third straight quarter as demand fell in the U.S. and Europe. Dublin-based CRH Plc had first-half earnings that missed its forecast amid a decline in the U.S.
