Operating profit continues to be under pressure from currency effects
Operating profit in the Group region Asia Pacific decreased 9.4 percent to CHF 934 million in 2014 with currency effects having a continuing negative impact coupled with lower performance in Holcim Australia. Like-for-like operating profit in the Group region was down 1.7 percent.
Overall, India recorded a plus in operating profit. Ambuja Cements was able to reverse the negative development of 2013 and reported increased operating profit. Operating profit at ACC remained impacted by the challenging situation on some of the Group company’s markets. Financial performance in Sri Lanka and Bangladesh was down despite the continued strong focus on overall cost efficiences. At Holcim Vietnam operating financial performance was impacted by an oversupplied market. Malaysia recorded operating profit on par with the previous year, while in Singapore it was down. Holcim Philippines benefited from higher volumes and favorable price environment that outweighed the negative effects of increased costs for power and raw materials. Indonesia’s performance was below that of 2013. Cement Australia increased like-for-like operating profit on the back of higher volumes and strict cost control. Holcim Australia suffered from a significant decline in operating profit as a result of the lower volumes from higher-margin mining projects and despite tight cost management. Holcim New Zealand however recorded higher operating profit in 2014.
China’s growth was driven by investment supporting urbanization and privatization. As the market continued to be characterized by excess capacity, the focus of Huaxin, Holcim’s local Group company, remained on differentiation through customer excellence initiatives, cost leadership, and vertical integration across the segments. While Huaxin’s cement volumes remained flat, operating profit was higher than in 2013 due to higher prices and lower costs.