Heidelbergcement blames corona, Brexit for 3.4 billion euro impairment

FILE PHOTO: A logo of HeidelbergCement is pictured at their headquarters in Heidelberg, Germany, June 21, 2016. Picture taken June 21, 2016. REUTERS/Ralph Orlowski/File Photo

FRANKFURT (Reuters) - Heidelbergcement HEIG.DE on Monday said a review of its assets in the second quarter had forced it to book a 3.4 billion euros impairment due to Brexit and the impact of the coronavirus pandemic on its business.

“HeidelbergCement carried out an impairment test of the asset portfolio. The audit leads to an impairment of goodwill and tangible fixed assets shown in the consolidated balance sheet totaling around 3.4 billion euros before tax,” Heidelberg said in a regulatory statement.

The impairment burdens the result but does not lead to liquidity outflows, HeidelbergCement said, adding that the corona pandemic has led to a deterioration of business expectations in the near term.

Britain’s withdrawal from the European Union is another impact, Heidelberg said, adding that half of the impairments are attributable to assets in the United Kingdom.

The company’s measures to focus on maintaining liquidity and cost savings, announced in February, will partially compensate for the impact caused by the decline in sales volumes in the second quarter of 2020.

In the long term, the company continues to expect good business prospects, HeidelbergCement said.

Reporting by Edward Taylor; Editing by Chizu Nomiyama