* Affirms 2014 outlook for higher revenue, operating profit
* Q1 operating profit 50 mln euros vs poll avg 16.9 mln
* Q1 revenue 2.75 bln euros vs poll avg 2.66 bln
* Favourable weather in Europe boosts sales
* CEO says eyes acquisition opportunities from
* Shares drop 1.96 percent
(Releads, changes dateline, adds quotes from CEO and analyst)
By Ilona Wissenbach and Marilyn Gerlach
HEIDELBERG, Germany, May 7 HeidelbergCement
could seize opportunities to snap up assets from
rivals Lafarge and Holcim which may be
forced into disposals to get the go-ahead from regulators for
their planned merger.
Holcim and Lafarge, the world's two leading cement makers in
terms of sales, agreed last month to the industry's biggest-ever
merger, which should helped reduce overcapacity that has plagued
the sector in recent years.
Competition watchdogs are expected to examine the deal,
which will create a global cement player with $44 billion in
annual sales and a market value close to $60 billion.
To appease the regulators, Lafarge and Holcim expect to sell
assets worth 5 billion euros ($6.97 billion) in annual sales,
mainly in Western Europe.
"That certainly presents an opportunity for HeidelbergCement
to do something," Chief Executive Bernd Scheifele told the
firm's annual shareholders meeting on Wednesday.
He added that he could not comment further because the two
companies had not yet formally presented their plans to European
HeidelbergCement, the global No. 3, is selling non-core
assets and slashing costs to trim debt racked up as it expanded
before the financial crisis curbed construction in rich
It confirmed its 2014 forecast for higher revenue and
operating income and reiterated plans to regain its investment
grade rating as it posted a more than five-fold rise in
quarterly operating income on Wednesday, helped by favourable
weather that offset negative currency swings.
PROFIT UP, SHARES DOWN
Operating income jumped to 50 million euros from the
year-earlier period, beating the average estimate of 16.9
million in a Reuters poll of analysts.
The firm's shares fell 3.2 percent at one point on Wednesday
to their lowest level in six weeks, with some analysts saying it
should have made more profit from a mild winter in Europe.
The stock was down 1.96 percent at 1252 GMT, underperforming
the STOXX 600 Construction and Materials Index which was down
1.2 pct and the Frankfurt blue-chip index GDAXI> which
was up 0.51 percent.
Analyst Marc Gabriel of Bankhaus Lampe said the company had
benefited from the mild weather, which allowed some construction
activity to begin earlier in the year. "But we are seeing this
(as) a pull-forward effect. One should not believe that this
development continues in the course of the year," he said.
The firm said it would continue to be disciplined in
spending this year, having failed to cut debt as of the end of
2013 compared with the end of 2012, due to higher investments,
currency losses and the payment of a German cartel fine.
Net debt was 7.958 billion euros as of March 31, down from
the year-earlier figure of 7.611 billion.
It also said it would focus "more intensively" on selling
its building products business in the UK and North America,
while investing to expand cement capacities in emerging markets.
Scheifele told shareholders the sale process would start in
the second half of this year but that it was not clear yet if a
deal could be struck before the end of the year. "We have a good
chance to sell the business for a good price," he said.
The business, which has about 1 billion euros in annual
sales, makes bricks, concrete pipes, precast concrete parts, and
U.S. and British residential and construction markets are
forecast to continue a recovery that allowed cement makers to
increase prices in the first quarter.
($1 = 0.7177 euros)
(Editing by Pravin Char)