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Holcim Sees 42 Percent Rise in 1Q Profit

Posted on: Thursday, 11 May 2006, 09:09 CDT

JONA, Switzerland - Holcim Ltd., one of the world's largest cement makers, reported a 42 percent rise in first-quarter net profit Thursday, with a strong increase in sales.

Holcim, which has greatly increased its operations in India, China and Britain in recent years, said it earned 170 million Swiss francs ($139 million) in the January-March period compared with an adjusted 120 million francs in the first quarter of 2005.

Sales rose 70 percent to 4.63 billion francs ($3.8 billion) from 2.73 billion francs a year ago. Operating profit rose to 627 million francs ($514 million) from 411 million francs.

The company said that demand was good in most regions.

Holcim shares rose 2.5 percent to 112.20 francs ($92.03) on the Zurich exchange.

The company said its operating profit margin fell to 13.5 percent from 15.1 percent because of the first-time full consolidation of British-based Aggregate Industries, which regularly posts a loss in the first quarter in the U.S. market because of seasonal factors.

"Unremitting price competition" led to lower margins in Brazil, a company statement said.

Holcim has spent more than 5 billion francs on acquisitions in recent years. Holcim said in March that it would increase its minority participation in Huaxin Cement in China to a majority stake, an investment that allows the company to increase its capacity to 36 million tons by the end of 2007.

Last year Holcim gained control over cement producer Ambuja Cement India Ltd. in an $800 million deal. In January the company announced it would acquire a 35 percent stake in India's Gujarat Ambuja Cements Ltd. for $1 billion.

The company is in the midst of a 1.7 billion franc capital increase to finance recent acquisitions.

Source: Associated Press/AP Online

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