Reuters: Hot Stocks: UPDATE 2-HeidelbergCement warns FX moves make 2013 targets harder

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UPDATE 2-HeidelbergCement warns FX moves make 2013 targets harder Nov 7th 2013, 13:50 Share this Email Print Reprints Thu Nov 7, 2013 8:50am EST * Q3 OIBD down 7 pct to 811 mln eur vs Rtrs poll 839 mln * 57 mln eur currency drag offsets improved volumes, prices * Sees 60-65 mln eur Q4 hit to OIBD from currency effects * Still sees 2013 sales, oper profit gains despite forex hit * Shares fall as much as 4.8 percent (Adds analyst, shares, background) By Christiaan Hetzner FRANKFURT, Nov 7 (Reuters) - A weaker Indonesian rupiah and other adverse foreign exchange moves will make it harder for HeidelbergCement to hit full-year sales and profit targets, the German firm said on Thursday, as its third-quarter earnings missed expectations. Shares in the group, whose second-biggest market by revenue is Indonesia, dropped as much as 4.8 percent on Thursday. However, some analysts noted the stock was still trading close to 12-month highs and praised the group's underlying performance as it outsold peers Lafarge and Holcim in the quarter at constant currencies, with higher volumes in all regions apart from Eastern Europe-Central Asia. "The disappointment is unjustified because the currency effect was underestimated in the polls," said Commerzbank's Norbert Kretlow. HeidelbergCement, one of the world's biggest cement producers, said quarterly operating income before depreciation (OIBD) fell 7 percent to 811 million euros ($1.1 billion), short of the 839 million euros forecast by analysts in a Reuters poll. Rising sales volumes, price increases and lower energy and raw material costs could not fully compensate for negative currency effects, it said. "We confirm our earnings outlook for 2013, even though reaching our targets is much more challenging than assumed at the end of the first half," Chief Executive Bernd Scheifele said. For 2013, HeidelbergCement aims to surpass the 14 billion euros in revenue and 1.61 billion in operating income posted last year, while significantly improving its pretax profit. Prior to the third-quarter result, analysts were on average expecting full-year operating income of nearly 1.71 billion. As part of its drive to rebuild profit margins following recent years of rising energy prices, Scheifele said customers in core markets like Germany, the United States and Britain would have to pay more next year. "We have clear intentions to hike prices next year," he told reporters. FX HEADWINDS Foreign exchange headwinds, mainly stemming from a weak Indonesian rupiah, amounted to 57 million euros in the third quarter, more than wiping out the company's operational improvement of 32 million euros on a like-for-like basis. The firm saw a further 60-65 million euro hit this quarter if exchange rates stay where they are, with the soft rupiah triggering a surge in the cost of coal, which is priced in U.S. dollars, for one of its biggest subsidiaries, Indocement. Indonesia accounts for about 11 percent of group revenue. Holcim, the world's largest cement maker by market value, said on Tuesday it no longer expected 2013 sales volumes to exceed last year's levels and forecast a decline due in part to sluggish demand in emerging markets like India, Mexico and Brazil. France's Lafarge, which like HeidelbergCement aims to regain an investment grade credit rating, said on Wednesday it would accelerate an existing cost-cutting programme to achieve its target one year ahead of schedule and announcing fresh savings goal of 600 million over 2015 and 2016. At 1335 GMT, HeidelbergCement shares were down 3.7 percent at 56.93 euros, the worst performance on Germany's blue-chip DAX index, though still close to their 12 month high of 60.89 euros. ($1 = 0.7392 euros) (Additional reporting by Ilona Wissenbach in Stuttgart; editing by David Cowell and Mark Potter) Link this Share this Digg this Email Reprints

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