HeidelbergCement launches $579 savings programme after Q3 profit drop

0
15
A logo of HeidelbergCement is pictured at their headquarters in Heidelberg

FRANKFURT (Reuters) -HeidelbergCement, the world’s No. 2 cement maker, launched a fresh 500 million euro ($579 million) savings programme to battle cost inflation, after higher energy costs caused a 11% drop in core profit.

“The general conditions in the third quarter were very challenging due to the exceptionally high year-on-year basis in the previous year and the significant increases in energy costs in recent months,” Chief Executive Dominik von Achten said.

He said that while the company, which competes with Holcim, remained optimistic for the fourth quarter, it has launched a programme to offset costs inflation by at least 500 million euros by the end of 2022.

Holcim last month has also warned about higher energy costs, a constant worry for power-hungry cement makers, but said it had responded to a 28% surge in its energy bill during its third quarter by increasing prices for its products by 5%.

HeidelbergCement’s third quarter operating core profit (EBITDA) fell 11% to 1.18 billion euros, lower than the 1.21 billion Vara Research forecast provided by the company.

But the group confirmed its outlook for the current year, still expecting operating EBITDA before exchange rate and consolidation effects to rise significantly.

($1 = 0.8633 euros)

(Reporting by Christoph Steitz; Editing by Maria Sheahan and Emma Thomasson)

tagreuters.com2021binary_LYNXMPEHA306X-VIEWIMAGE