ZURICH (Reuters) -Holcim on Friday reported a small increase in profit during its third quarter despite the strong Swiss franc weighing on the materials company's reported sales. Recurring operating
Holcim profit edges higher despite currency drag
By John Revill
ZURICH (Reuters) -Holcim on Friday reported a small increase in third-quarter profit, as the building materials company's switch to more profitable products helped offset currency headwinds.
Holcim has been trying to boost profitability by selling more low-carbon cement and concrete, increasing its focus on more complex products like roofing and flooring, and recycling demolition waste to make new raw materials.
This helped lift Holcim's profit margin to 20.7% in the three months to the end of September, cushioning the impact of the appreciation of the Swiss franc, Holcim's reporting currency.
MARGIN EXPANSION DRIVEN BY FOCUS ON HIGHER-VALUE PRODUCTS
"Margin expansion was driven by our high-value strategy, scaling up our sustainable offering to meet customer demand, and accelerating decarbonization and circular construction for profitable growth," said CEO Milan Gutovic in a statement.
The company's shares were indicated up 2% in premarket activity in Zurich.
During the third quarter Holcim's recurring operating profit rose by 8.1% in local currencies, although this was reduced to 0.1% when reported in Swiss francs.
The figure of 836 million Swiss francs ($1.05 billion) was slightly ahead of analysts' forecasts for 816 million francs.
REPORTED FIGURES HIT BY APPRECIATION OF THE SWISS FRANC
Local currency sales rose by 4.9% to 4.04 billion francs during the quarter, but this translated into a 2.5% decline when converted into francs.
Holcim confirmed its full-year guidance, saying it still expected to increase its local currency sales by 3-5% and its recurring operating profit by 6-10%.
($1 = 0.7931 Swiss francs)
(Reporting by John Revill, Editing by Miranda Murray and Jan Harvey)
