Cement Maker Holcim Reports 39.2% Profit Increase

Cement maker Holcim reported a 39.2% increase in net profit for 2006 on Wednesday, saying its recent expansion in India, strong markets and efficiency gains helped boost its performance.

Net profit rose to 2.10 billion Swiss francs ($1.72 billion; 1.3 billion euros) from 1.51 billion francs in 2005, restated for accounting changes. The company did not release figures for the fourth quarter.

Holcim, which plans to pay $610 million (460 million euros) to buy out minority stakes in its Canadian unit and increase its stake in India's Ambuja Cement India, said operating earnings before interest, taxes, depreciation and amortization increased to 6.09 billion francs ($4.98 billion; 3.76 billion euros) from 4.63 billion francs.

Sales rose 30% last year to 24 billion francs ($19.58 billion; 14.8 billion euros) from 18.47 billion francs.

The company also said it plans to raise its 2006 dividend to 2 francs ($1.63; 1.23 euros) per share from 1.65 francs last year.

Holcim shares fell 0.9% to close at 121.10 francs ($98.79; 74.67 euros) in Zurich.

Earlier this week, the company increased its stake in Ambuja to 78% from 67% for 5.27 billion Indian rupees ($119 million; 89.95 million euros). It also announced plans to buy out minority shareholders of Canada's St. Lawrence Cement Group for around 571 million Canadian dollars ($493 million; 372.64 million euros).

Holcim, which entered India in 2005, now has the No. 2 position in that market. Indian cement demand is expected to grow by up to 12% this year, topping expected 9% growth in China. The leader in the Indian market is privately held Grasim Industries.

Holcim said last year it plans to acquire a majority stake in Huaxin Cement, a southern Chinese cement producer.

Paris-based Lafarge, Holcim's major competitor, last week reported a 25% increase in 2006 net profit to 1.37 billion euros from 1.1 billion euros in 2005.