Holcim (SIX:HOLN), the prominent building materials supplier, has reported a third-quarter recurring operating profit of 1.67 billion Swiss francs ($1.93 billion), surpassing analyst expectations. The company, which anticipates spinning off its North American business in the next year, achieved a profit margin of 23.5%, an increase from 21.8% the previous year. This was attributed to the sale of high-margin low carbon cement and other building products.
Despite a 3% decline in revenues to 7.12 billion francs, falling short of the projected 7.19 billion francs, the company maintained profitability through strategic acquisitions, adding six companies in the quarter. Holcim's total acquisitions for the year now number 17.
Chief Executive Miljan Gutovic highlighted the strong earnings profile and record margins, emphasizing the company's resilience amidst market challenges. Holcim reaffirmed its full-year guidance, expecting to grow sales in the low single-digit percentage range in local currencies and to achieve a higher rate of recurring operating profit growth.
The company's shares showed a slight dip of 0.1% in premarket trading on the Zurich stock exchange. Analysts, such as Bank Vontobel's Mark Diethelm, noted the robust development of recurring EBIT despite lower sales volumes in North America and Europe.
Looking ahead, Holcim's planned U.S. listing of its North American business is slated for completion in the first half of 2025. The North American market, which is Holcim's second-largest after Europe, is involved in 150 infrastructure projects, demonstrating strong market fundamentals.
The company's financial performance indicates a strategic focus on profitable products and expansion through acquisitions, positioning itself for continued growth amidst global market fluctuations.
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