ZURICH (Reuters) – LafargeHolcim ( LHN.S) said it had actually weathered the “tsunami” of the coronavirus crisis battering the building and construction industry after a difficult 2nd quarter marked by falling sales and revenue.
SUBMIT IMAGE: The logo of LafargeHolcim, the world’s largest cement maker, is seen at its head office in Zurich, Switzerland March 2,2017 REUTERS/Arnd Wiegmann
The world’s most significant cement maker is seeing the start of a recovery, President Jan Jenisch stated on Thursday, adding he was confident about the sector’s ability to hold up against any second wave of COVID-19
Sales in all five of its areas had returned to 2019 levels by the end of June as lockdowns eased, the Swiss company said,
” This is a tsunami crisis and in our case it is currently over,” Jenisch told press reporters. “We anticipate a strong second half of the year based upon June’s complete healing, the pattern of our order book and upcoming federal government stimulus packages.”
His upbeat comments were echoed by German rival HeidelbergCement ( HEIG.DE) which also stated it was seeing an improvement in construction activity throughout the 2nd quarter.
LafargeHolcim said its sales fell 24%to 5.4 billion Swiss francs (4.56 billion pounds) in the quarter, although above the 4.93 billion francs expected by experts in a company-gathered agreement.
Recurring operating revenue (EBIT) shrank 32%to 932 million francs, beating the 725 million francs agreement.
The company’s share price was up 3.4%in early trading.
” The V-shaped need healing experienced by LafargeHolcim in June is very motivating,” stated Bank Vontobel analyst Bernd Pomrehn. “The anticipated approval of facilities stimulus programs should supply more self-confidence that this demand healing is sustainable.”
Nevertheless some experts pointed to possible issues ahead for the sector, with business’ ability to preserve costs potentially restricted in future as economies dealt with the aftermath of COVID-19, while facilities government stimulus bundles might take a while to be approved and executed.
Emerging markets depending on traveler or oil income could particularly struggle, they added.
With really few exceptions, LafargeHolcim was in complete operation at all its plants, Jenisch stated, including the company’s success was being assisted by cheaper energy rates along with having the ability to raise prices by around 1%.
Jenisch did not think a second wave of the virus would hinder the recovery, following preventative measures taken by federal governments and business at developing websites.
” You will see waves and hotspots, however I do not think building and construction websites will necessarily be affected by this,” he informed reporters.
Reporting by John Revill; Editing by Michael Shields and Pravin Char