HeidelbergCement 3Q profit rises 60%
HeidelbergCement 3Q profit rises 60%
Bloomberg, Frankfurt
HeidelbergCement AG, the German cement- maker bought by billionaire Adolf Merckle, said profit rose 60 percent in the third quarter, driven by demand in the U.S.
Net income advanced to 273.6 million euro (US$320.9 million) from 171.4 million euro, the Heidelberg-based company said on Tuesday.
Sales advanced 14 percent to 2.25 billion euro.
HeidelbergCement is pushing through price increases in markets such as Indonesia and the U.S. to counter rising energy expenses, which make up about 30 percent of cement production costs.
The company is relying on sales abroad and cost cuts as spending on German building falls for an 11th straight year.
"We anticipate a moderate increase in sales volumes and turnover for the whole of 2005," HeidelbergCement said in a statement.
"The economic environment in the U.S., the new European Union countries and Asia is also expected to remain stable in the coming year."
The shares have this year risen 55 percent to a six-year high, valuing the company at 7.76 billion euro.
The stock has gained 37 percent since June 10, when 71-year- old Merckle made a 5.8 billion-euro bid for the business through Spohn Cement GmbH.
Spohn owns 79 percent of HeidelbergCement.
Profit was equal to 2.47 euro a share, compared with 1.71 euro.
Analysts had expected net income of 226 million euro on sales of 2.15 billion euro, according to the median of six estimates.
U.S. construction spending rose for a third straight month in September, led by the biggest gain in homebuilding since February, the Commerce Department in Washington said on Nov. 1. HeidelbergCement gets about one-quarter of sales from North America.
Germany's biggest cement company said in September it will cut 1,100 administrative jobs across Europe in an effort to save 50 million euro a year by 2008.
Departments for strategy, development and finance will be centralized at the headquarters in Heidelberg, over the next two to three years.
About 980 jobs have been cut, the company said on Tuesday.