Holcim remains positive despite drop in profit

Holcim is upbeat about its future Keystone Archive

Holcim, the world's number two cement supplier, has announced a 38 per cent drop in net profit in 2002 to SFr506 million ($365 million).

The canton St Gallen-based company said one-off factors were to blame for the fall in profit, which was in line with expectations. It predicted “robust results” for 2003.

In a statement on Wednesday, Holcim said 2002 sales fell to SFr13 billion from SFr13.6 billion the year before. Operating profit dropped to SFr1.9 billion from SFr1.95 billion.

“Overall, despite the severe crises in many countries in the world, I think Holcim has done an excellent job on an operational level,” Holcim CEO Markus Akermann told swissinfo.

“We could maintain our operating profit, despite very, very deep fluctuations of the currencies,” he added.

Special factors

Holcim said net profit had been hit by special factors, including SFr120 million set aside to pay a possible fine in Germany, SFr63 million written off against closed plants in Argentina, and SFr31 million written off on a stake in the national airline, Swiss.

Two Holcim units are among 30 firms under investigation by the cartel office in Germany.

“One part of the accusation is that there was not sufficient competition on a regional basis. Based on that apparently, the cement companies had higher revenues, but we are seriously questioning that,” Akermann said.

“We do not yet know what the exact content of the fine will be, but we will certainly reserve the right to appeal against the decision,” he commented.

Inquiry

The cartel investigation is the second scandal to hit the firm in recent years.

Holcim chairman and majority shareholder Thomas Schmidheiny stepped down on an interim basis last year after he came under investigation for alleged insider trading in Spain.

Last month, he was fined €1.5 million by a Spanish court and announced he would not return to the board.


Holcim told swissinfo that Schmidheiny had acted privately and the matter had nothing to do with the company itself.

“He decided, after receiving the verdict of the Spanish authorities, not to come back as chairman of the company, especially also in the context of possible other matters where he might also be involved outside of Holcim,” said Akermann.

Swissair debacle

This can be seen as a reference to Schmidheiny’s role as a board member of Swissair, which collapsed in October 2001.

Holcim said that it was difficult to predict how business would develop but it was optimistic about the future.

“Thanks to its excellent positioning and its ability to adapt fast to changing situations, the Holcim group can also boast robust results during an economic downturn,” commented Akermann.

“And we will profit all the more from an economic recovery.”

swissinfo, Robert Brookes

Holcim summary

Holcim profit fell 38 per cent in 2002 to SFr506 million.
The leading cement supplier blamed one-off factors for the drop in profit.
It projected “robust profits” in 2003.