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Earnings

HeidelbergCement cost cuts boost quarterly profit

FILE PHOTO: A logo of HeidelbergCement is pictured at their headquarters in Heidelberg, Germany, June 21, 2016. Picture taken June 21, 2016. REUTERS/Ralph Orlowski

FRANKFURT (Reuters) - HeidelbergCement HEIG.DE, the world's No.2 cement maker, on Thursday posted a 13% rise in third-quarter core profit, with cost cuts helping it to shrug off the impact of the COVID-19 pandemic and forecast higher full-year earnings.

“HeidelbergCement is very well positioned, even for difficult times,” Chief Executive Dominik von Achten said after the results.

“When the economy picks up again and construction activity in our markets returns to normal we will have very good prospects for sustainable and profitable growth.”

Third-quarter earnings from current operations before depreciation and amortisation came in at 1.33 billion euros ($1.56 billion) and the company now also expects them to be up in 2020 from the 3.58 billion euros in 2019.

Cash savings stood at 721 million euros after the first nine months of the year, supported by the company’s COPE efficiency plan launched at the start of the year.

“Solid report and FY20 earnings guidance ... should act positive, but keep in mind that shares had a good run,” one Frankfurt-based trader said.

HeidelbergCement shares are down more than 18% this year but have recovered by three quarters since hitting an intra-year low in mid-March, when the pandemic pummelled stocks around the world. They were up 1.1 in early Frankfurt trade HEIG.F on Thursday.

Von Achten's remarks chimed with larger rival LafargeHolcim LHN.S, which last week gave an upbeat assessment on the construction industry, raising its full-year guidance and saying the COVID-19 recovery was well under way.

($1 = 0.8519 euros)

Editing by Michelle Adair and David Goodman

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