May 9, 2018 / 5:33 AM / 2 years ago

UPDATE 2-Harsh winter chills HeidelbergCement first-quarter profit

* Q1 earnings down pct at 252 mln euros vs 348 mln Rtrs poll

* Blames harsh winter echoing rival LafargeHolcim

* Confirms 2018 outlook

* Shares down 1.3 pct (Adds trader comment, share reaction, context)

By Christoph Steitz

FRANKFURT, May 9 (Reuters) - HeidelbergCement on Wednesday said a weak dollar and cold winter temperatures that hampered construction activity contributed to a 34 percent drop in first-quarter core earnings.

Freezing weather conditions in North America and Europe, coupled with fewer working days, were behind the fall in profits from current operations before depreciation and amortisation (RCOBD) to 252 million euros ($299 million) in the quarter.

That was below the 348 million euros average expected by analysts in a Reuters poll.

Bigger rival LafargeHolcim, which reported results on Tuesday, also blamed the harsh winter for a 13-percent decline in first-quarter earnings.

HeidelbergCement, the world’s second biggest cement maker, said deliveries of aggregates and ready-mixed concrete were both down 2 percent, as growth in the Asia-Pacific region could not offset the weather-related weakness in Europe and the U.S. market.

“Weak earnings were feared but quite significant earnings miss should at least weigh on shares at trading start as guidance will be more ambitious,” a Frankfurt-based trader said.

Heidelberg’s shares were down nearly 1.3 percent by 0718 GMT, among the biggest decliners in Frankfurt’s blue-chip index.

Year-to-date, its shares have underperformed those of LafargeHolcim.

HeidelbergCement kept its forecast for 2018, still expecting profit from current operations to increase by a mid- to high-single digit percentage before exchange rate and consolidation effects.

“With the positive underlying market dynamics, we’re confident that we can significantly increase our operational performance in the coming quarters,” Chief Executive Bernd Scheifele said.

Keeping an equal-weight rating on the stock, analysts at Morgan Stanley said the weak results would only have a limited impact on the brokerage’s forecasts due to the traditionally weak contribution of first-quarter results to the full year.

HeidelbergCement also faced currency pressures from a weaker dollar in the United States, one of its main markets. This resulted in a 264 million euro hit to first-quarter sales, which were down 4 percent.

$1 = 0.8436 euros Editing by Maria Sheahan and Jane Merriman

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below