Harsh European winter crushes Holcim profit
ZURICH (Reuters) - Holcim (HOLN.VX), the world's second largest cement maker, held out the prospect of more price rises after a harsh European winter pummeled net profit in the first quarter.
Sales of cement, aggregates, ready-mix concrete and asphalt all dropped by double digits across the region and net profit after minorities was 10 million Swiss francs, well short of an average forecast for 41.2 million.
Sales increased 2.2 percent to 4.760 billion Swiss francs. Analysts had forecast average sales of 4.718 billion francs.
"The harsh winter brought many construction sites in Western and Eastern Europe to a temporary standstill in February," the company said in a statement.
Energy-hungry cement makers are grappling with high costs for fuels, such as coal, diesel and oil, which are used in vast amounts during the manufacturing process. They also have high electricity costs as ingredients have to be crushed and burned.
Holcim said it had been able to offset costs rises through higher prices, except in the Africa and Middle East region, and echoed French competitor Lafarge in noting that energy and transport costs appeared to be stabilising.
European rivals Lafarge (LAFP.PA) and Germany's HeidelbergCement (HEIG.DE) also plan to push through price hikes to offset soaring energy costs.
Holcim said it would pass on inflation-induced cost increases.
The Swiss group, which makes more than half its sales in emerging makers, forecast rising demand for building materials in Asia, Latin America, Russia and Azerbaijan in 2012. It also expects demand in North America to pick up.
(Reporting by Caroline Copley; Editing by David Cowell)
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