Holcim Ltd. raised its full-year guidance for the second time this year after robust demand for more sustainable building materials saw third-quarter profit beat expectations. The Swiss cement maker now sees full-year growth in recurring EBIT of up to 12%, from a previous estimate of 10%, with sales forecast to increase by about 5%.
"This is a strong performance in the face of challenging markets," said RBC analyst Anthony Codling. Shares gained as much as 6%, the most since April. The company's bullish outlook follows a 17% jump in recurring EBIT in the third quarter to 976 million Swiss francs ($1.2 billion), topping an estimate for 946.7 million francs.
Increased customer demand and cost discipline helped drive the momentum, CEO Miljan Gutovic said. Holcim's outlook underscores how its lower carbon footprint products have helped it avoid growing pressure from higher energy costs. Infrastructure build in Europe is accelerating and residential building permits are also seen underpinning its business.
In September, the company posted a record in alternative fuel usage in Europe, well above 70%, with a target of 90% by 2030. Germany, Greece, Romania, Spain and Switzerland led sales growth in Europe, while Latin America also saw net sales increase. Holcim closed 10 acquisitions in the first half and aims to announce roughly 15 by year-end.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing