In Southeast Europe, public sector spending cuts had a negative impact on infrastructure projects and Holcim posted declines in sales volumes on most markets in the region, the group said in its first quarter earnings report.
Sales of aggregates increased in the Czech Republic, and sales of ready mix-concrete climbed in Croatia, Hungary, and Romania.
Holcim’s first-quarter global sales increased 2.2%, to CHF4.76 billion. In Europe, however, sales of cement, aggregates, ready-mix concrete and asphalt decreased by more than 10% on several market, affecting the group’s net profit.
Net income attributable to shareholders stood at CHF10 million, well below analysts’ expectations of CHF41.2 million.
“The harsh winter brought many construction sites in Western and Eastern Europe to a temporary standstill in February,” the group said in its report.
Cement producers, an industry with a high consumption of energy, are confronted with high costs for fuel and electricity. Holcim said it has managed to balance its cost increase with higher prices, except in Africa and the Middle East.
Lafarge and HeidelbergCement, Holcim’s main competitors on the Romanian market, also plan to raise prices to compensate for higher energy costs.
Holcim expects demand for building materials to rise in emerging markets in Asia and Latin America, Russia and Azerbaijan in 2012, as well as a slight improvement in North America.