HeidelbergCement Q4 sales rise 9.6 percent on Asia revenue

HeidelbergCement Q4 sales rise 9.6 percent on Asia revenue

Bloomberg, Frankfurt

HeidelbergCement AG, Germany's largest cement maker, said fourth- quarter sales gained 9.6 percent after it expanded in foreign markets from Eastern Europe to Asia. The company expects revenue to rise this year.

Sales climbed to 1.71 billion euro (US$2.25 billion) from 1.56 billion euro a year earlier. Revenue beat the 1.64 billion-euro median analyst estimate. The Heidelberg-based company will report final figures including net income on March 23.

HeidelbergCement expects a "moderate" gain in 2005 sales, helped by higher demand in Asia, Eastern Europe and the U.S. Chief Executive Bernd Scheifele, 46, took over the helm on Feb. 1 and two days later said the company will report a loss for 2004 because of 700 million euro in costs.

HeidelbergCement plans to sell new shares to raise 270 million euro, it said on Monday.

"HeidelbergCement is on a good course following the good earnings outlook," said Ralph Herre, a Stuttgart-based analyst at Landesbank Baden-Wuerttemberg, who rates the stock "buy."

Cement and clinker sales in 2004 rose to 65.2 million tons from 51.1 million tons a year earlier, boosted by an increase in North America as well as Africa, Asia and Turkey. Sales in the region comprising Africa, Asia and Turkey tripled last year.

"The growth impetus is expected from the U.S., Asia and middle and Eastern Europe," the company said in the release. "Growth remains limited in the euro zone and weak in Germany."

Building projects in Asia have lured HeidelbergCement and other European cement makers. The German company has bought control of PT Indocement Tunggal Prakarsa in Indonesia.

Holcim Ltd., the world-largest cement company, has agreed to invest $800 million to win control of India's Associated Cement Cos.

HeidelbergCement will report a net loss of as much as 400 million euro for last year after asset writedowns and a program to cut costs at the Belgian-Dutch unit.

HeidelbergCement plans to offer investors 1 new share for every 13 held for 35 euro apiece.

Shares of HeidelbergCement, which traces its origins to 1873, when Johann Philipp Schifferdecker converted a mill on the banks of the Neckar river at Heidelberg into a cement factory, have gained 44 percent in the past six months, boosting the company's market value to about 5 billion euro.

The 67-member Bloomberg European Industrials Index has risen 17 percent in that time.

Fourth-quarter revenue was calculated by subtracting nine- month sales from the full-year figure.