Holcim, the world's second-largest cement maker, said 2009 would remain difficult with demand still weak in the United States, Spain and Eastern Europe but emerging markets helping to slow a decline in earnings.
Holcim, which is tapping shareholders for fresh funds to buy the Australian business of debt-laden Mexican rival Cemex for A$2.02 billion, also said the gross proceeds from its capital hike would be 2.1 billion Swiss francs ($1.9 billion).
The subscription price for the hike, announced last month, is 42 francs per share, at a 28 percent discount to the closing price of 58.45 francs per share yesterday.
“Up to May there was no reversal of the underlying economic trend visible. Accordingly, the trading activity remained restrained," Holcim said in a statement.
“On the other hand, in Asia - e.g. in India - and in Latin America, Holcim sees a quite satisfactory trading activity.” Holcim said its presence in emerging markets, accounting for 75 per cent of its cement capacity, had slowed the decline in EBITDA.
Holcim and its rivals France's Lafarge and Cemex are facing crumbling construction markets and building materials group CRH gave a gloomy outlook yesterday.
“Investors have no other choice but to wait for a substantial improvement,” analysts at Wegelin said, pointing to the strong increase in Holcim's share price since March.
Holcim shares were trading 1.7 per cent lower at 57.45 francs in early trade, underperforming a flat DJ Stoxx European construction index.
But analysts see Holcim well placed to benefit from government spending on infrastructure programmes and demand in emerging countries, such as India, which is investing in railways, shopping centres and airports.
Holcim will ask shareholders to approve the rights issue at an extraordinary general meeting later today.
Reuters