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Holcim confident it can handle energy price rises – Metro US

Holcim confident it can handle energy price rises

Swiss cement maker Holcim logo is seen in Basel
Swiss cement maker Holcim logo is seen in Basel

By John Revill

ZURICH (Reuters) -Holcim is confident it can handle energy price spikes caused by the Ukraine crisis, CEO Jan Jenisch said on Friday, after the world’s biggest cement-maker reported fourth-quarter earnings slightly ahead of forecasts.

The Swiss company expects “very limited” direct impact from the conflict, which has driven fuel costs higher, retaining its upbeat assessment for the construction sector in 2022.

“We have no operations in Ukraine and only a small, local business in Russia which makes up less than 1% of group sales,” Jenisch told reporters.

“We don’t depend on Russian gas, our European plants don’t use it,” he said. “The direct influence is very limited at this time.”

Energy to run its cement and clinker plants made up about 13% of Holcim’s operating costs in 2021, Holcim said, slightly more than a year earlier. But the company offset the increases with its own price rises, Jenisch said.

He expects post-COVID infrastructure spending projects to materialise this year and support the construction sector, while potentially higher interest rates were not a concern as a brake on building activity.

In 2022 Holcim expects growth to continue in all regions, especially as countries further relax or exit pandemic restrictions, with sales expected to rise by more than 6%.

For the three months ended Dec. 31, sales rose 17% to 6.99 billion Swiss francs ($7.57 billion), Holcim reported, better than the 6.73 billion francs expected by analysts. Recurring operating profit of 1.09 billion francs was also slightly ahead of forecasts.

For 2021 it proposed a dividend of 2.20 francs, up from 2.00 francs for 2020 after its full-year net profit rose 35.4%.

Shares in the company, whose performance are seen as an indicator for the broader construction sector, were up 3.6% in premarket activity.

($1 = 0.9235 Swiss francs)

(Reporting by John Revill; editing by Michael Shields and Jason Neely)

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