Holcim’s sales grew by five percent in H1 2011 despite real estate slowdown: BlomInvest
Holcim Liban (HL) saw its unconsolidated net sales grow to LL146 billion ($97.4 million) in the first half of 2011, an increase of almost five percent compared to the same period last year.
“Holcim seems to have unexpectedly shielded its grey cement operations from the slowdown in the real estate sector in the country,” said an equity study report by Blominvest.
According to the report, the continued demand for grey cement, which mostly serves the local market, was supported by a boom in illegal residential construction on public property.
The revenues of Holcim’s subsidiary the Société Libanaise des Ciments Blancs (SLCB), which produces white cement, fell by nine percent year-on-year to around LL10 billion (around $6.6 million).
According to BlomInvest, SLCB’s production activity declined on dampened demand in both local and export markets. It said that the turmoil in Syria and the availability of cheaper substitute from Turkey have cut SLCB’s sales. Revenues generated from export markets made up 12 percent of Holcim’s consolidated sales for 2008, two percent for 2009, and were negligible in 2010. BlomInvest attributed the decline in the export sales over the past few years to the high local demand which exhausted the company’s total capacity during that period.
HL’s gross income increased by around 13 percent y-o-y to around LL59 billion ($39 million) in the first six months of 2011 spurred by revenue growth and increased production efficiency. SLCB saw a 14 percent y-o-y decrease in gross profit to LL3.2 billion (around $2 million).
Date Posted: Oct 19, 2011