HEIDELBERG (dpa-AFX) - Building materials group Heidelberg Materials (formerly Heidelbergcement) is becoming more optimistic about the current year after posting earnings growth in the second quarter. "We closed the first half of 2023 with a good result," Group CEO Dominik von Achten said in Heidelberg on Thursday. He added that the company held up well even in a weaker market environment with some significant declines in sales volumes. For the second half of the year, the management board remains confident and is therefore once again raising the outlook for 2023 substantially. The share price rose sharply in the morning, most recently leading the Dax with a four percent premium.

For the current year, the Management Board now expects adjusted earnings before interest and taxes of between 2.7 and 2.9 billion euros. Previously, management had targeted 2.50 to 2.65 billion euros. Sales are expected to continue to grow moderately year-on-year after adjusting for foreign exchange and acquisitions and divestments. In 2022 adjusted earnings before interest and taxes were just under 2.5 billion euros and sales a good 21 billion euros.

The good order situation in infrastructure projects and parts of commercial construction should partly offset the decline in residential construction this year, the Heidelberg-based company added. Energy prices had eased in the first six months, but remained susceptible to fluctuations and were still very significantly higher than in previous years.

In the first half of the year, sales climbed 5.3 percent year-on-year to just under 10.5 billion euros. Almost all regions contributed to this. While the company was able to sell significantly more in North America, sales in the Africa and Eastern Mediterranean region declined. Volumes continued to decline due to the economic slowdown, particularly in the private housing sector, it said.

Earnings before interest and taxes (Ebit) adjusted for nonrecurring items increased by almost a third to almost 1.2 million euros. In addition to cost savings, lower energy and raw material prices were the main contributors to the strong increase. Analysts had expected significantly less. The bottom line was a profit attributable to shareholders of 719 million euros, compared with 542 million euros a year earlier.

Swiss competitor Holcim also performed significantly better in the first half of the year. Although the building materials group posted lower sales and operating earnings in the first six months due to the sale of its cement businesses in India and Brazil, adjusted for the disposals and special effects sales and earnings increased significantly. For the full year, Holcim continues to target organic sales growth of more than six percent. At the same time, operating profit before special effects is expected to grow organically by more than ten percent./mne/tav/jha/