The three domestic units of major cement producers Lafarge, Holcim and HeidelbergCement have brought cumulated profits of above EUR1 billion to their parent companies (Lafarge Ciment-EUR501.1 million, Carpatcement Holding-EUR376 million, Holcim Romania-EUR143.6 million) over the past five years, according to ZF calculations based on Finance Ministry data.
Major cement companies present domestically managed to keep their profit margins extremely high last year. Lafarge Ciment and Carpatcement Holding reached or even topped 30%, although turnover shrank on the falling demand.
The only company that had a lower profitability was Swiss-held Holcim, with a 4% margin, even though it became the leader on the domestic cement market, with EUR196.4 million in turnover. Holcim Romania had thinner profit margins in 2008 and 2009 as well, as they did not exceed 10%.
Cement market companies were among the most profitable in Romania before the crisis, too, posting profit margins of 30-45%, according to ZF data. Despite the lower level now, the industry still boasts significant profits.
Carpatcement Holding, controlled by Germany’s HeidelbergCement, last year reached a 30% profit margin, while turnover amounted to almost EUR189 million, that is just 1.6% in the group’s total turnover. Still, the domestic subsidiary generated 11% in the net profit of HeidelbergCement, according to ZF calculations. “The figures were made possible by adequate cost management coupled with risk management, as well as by strategic collaboration with our partners,” said Florin Aldea, general manager of Carpatcement Holding.
“I do not believe we are speaking of very high margins for this industry, the more so as we are part of the heavy industry, with equipment that needs to be permanently maintained and gradually replaced. We believe 30% is an acceptable percentage for an industry like ours,” Aldea stated.
The domestic subsidiary of Lafarge, Lafarge Ciment, which generates a little over 1% of the French group’s global turnover, also brought around 5% of the parent company’s net total profit. Against total turnover worth EUR183.3 million, Lafarge Ciment posted a 33% profit margin.
Holcim Romania, though still profitable, reported a 4% profit margin, below the level registered by the Swiss group, of 7.5%. Holcim Romania generated 1.3% of the parent-company’s global turnover and 0.7% of its overall profit.
(English version by Catalina Apostoiu; Editing by Loredana Fratila-Cristescu)