ZURICH, July 26 (Reuters) - Holcim lowered its full-year sales guidance on Friday, after a downturn in Europe and North America hit second-quarter sales at the cement and building materials maker.
In the first results under new Chief Executive Miljan Gutovic, sales during the second quarter fell 1.6% to 7.23 billion Swiss francs ($8.21 billion), missing forecasts for 7.31 billion francs.
Downturns in North America, where building projects have been hit by unfavourable weather, and continued weak market conditions in Europe, were the main factors for the sales decline.
Sales in North America fell by 3.3%, a negative for Holcim's plans to separate and list the business next year. Still, the North American spin-off was on track and expected to be completed in the first half of 2025, the Swiss company said.
Europe, Holcim's biggest market and the core of the remaining business after the spin-off is completed, saw sales fall 0.1% as economic worries and higher interest rates weighed on building projects.
Holcim revised down its full-year guidance after the results, saying it now expected annual sales growth in local currencies in the low single-digit percentage range. That was a downgrade from previous guidance for an increase of more than 6%.
But while sales fell, operating profits rose, as Holcim cut costs and benefited from higher margins at companies it bought.
During the period from April to June, recurring operating profit rose 8.2% to 1.68 billion Swiss francs ($1.91 billion), beating analyst forecasts for 1.63 billion.
The company said it was concentrating on profit margins, raising its full-year operating profit margin guidance to above 18.5%, from 18% previously.
($1=0.8806 Swiss francs)
Reporting by John Revill; Editing by Rachel More and Clarence Fernandez
Source: Reuters