Holcim reports 80% drop in 1Q net profit
ZURICH: Swiss cement maker Holcim AG reported Wednesday an 80 percent drop in first quarter net profit, as the global economic downturn and a harsh winter in Europe and North America hit the construction industry hard.
Holcim said profits attributable to shareholders were 74 million Swiss francs ($65.3 million), compared with 370 million francs in the same quarter last year.
Sales fell 18 percent to 4.52 billion francs from 5.51 billion francs.
In Europe, the collapse of the housing market in Britain and Spain dragged sales down by 33 percent to 1.51 billion francs.
North American sales dropped 20 percent to 517 million francs. In Latin America they declined 16 percent to 820 million francs, while in Africa and the Middle East they dropped by 6 percent 296 million francs.
By contrast, sales in Asia dipped only 1 percent to 1.52 billion francs.
"There are still markets where construction activity remains solid, which benefited Holcim thanks to its global network and the strong presence in Latin America and Asia," the company said.
Looking ahead, Holcim predicted that 2009 would be a difficult year and offered no guidance for how the company will fare.
"In Europe and North America, the next few months will show to what extent the decline in demand for building materials is attributable to the hard winter as opposed to the recessionary environment," it said.
Holcim said it would prioritize the group's financial stability, cutting back on excess capacity to offset falling sales.
Holcim shares were down 1.6 percent to 59.45 francs ($52.52) on the Zurich exchange.