Holcim posts plunging profits for first quarter
Swiss cement group Holcim, which is poised to merge with French rival Lafarge to create a global concrete behemoth, says that its profits plunged by 58 percent in the first quarter from the same period a year earlier.
In a financial report released on Monday, Holcim noted that the figures were skewed by a one-off boost in the same period of 2013 arising from the sale of business interests in Australia, meaning the January to March performance this year was not comparable.
As a result, Holcim's net profits fell to 80 million francs ($91 million).
Despite the group's explanations, analysts polled by the Swiss-based financial news agency AWP said that the first-quarter performance was slightly below the forecast profit of 82 million francs.
Holcim's operating profit was meanwhile up by 9.3 percent, reaching 295 million francs -- with 237 million francs of that coming thanks to the group's ongoing cost-cutting drive.
Holcim said that it was on track to meet its target of an increase in operating profit of 1.5 billion francs by the end of 2014.
The group also underlined that first-quarter sales had been robust, notably in Europe where good winter weather conditions have been a boon for the construction sector.
Excluding exchange rate fluctuations, global net sales rose by 7.8 percent to 4.3 billion francs.
Taking into account currency volatility, they fell by 5.4 percent.
Holcim and Lafarge announced their merger plans on April 4, and the move was approved by their respective boards three days later.
The move will create the world's biggest concrete group worth 40 billion euros, with an eye to booming construction in emerging markets, the two groups said.
In a related development, Switzerland's top prosecutor said it is studying whether to launch an investigation into alleged insider share trading linked to the merger.
On the day the union was announced, shares in Holcim jumped 7.3 percent.
Individuals are suspected of abusing their position inside the company to trade shares on the stock exchange before the accord was unveiled, weekly newspaper SonntagsZeitung reported on Sunday.