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Heidelberg Cement expects challenging H1/12


German newspaper Rhein-Neckar Zeitung quoted HeidelbergCement’s CEO Scheifele as saying that he expects a difficult H1 ahead in light of the sovereign debt crisis as well as continued high energy costs. On a more positive note, Scheifele suggested that Germany should do comparatively well and that he expects some recovery in H2.

He added that, in the medium term, the company aims for a dividend distribution of 30-35% of its net income. While the challenging market outlook should not come as a surprise, many had hoped for some relief on the energy cost side.

Most commentators believe that the cement industry has not recovered from the Lehman crisis and hopes for a more pronounced improvement within core markets have been pushed back repeatedly. That said, HeidelbergCement’s good geographical diversification, which led to a substantial out performance vs. peers, its prudent financial policy and the (gradual) improvement in its credit profile continue to make it a favourite among investors.