Holcim Reports Decline in Profit but Increased Dividends

Holcim Group reported weak profit for fiscal 2024. However, they exhibited growth in recurring EBIT and margin. An 11 percent dividend increase indicates confidence for future growth in fiscal 2025.

Date: 28-02-2025

AI Rating: 5

Net Income: Net income dropped 4.4 percent to 2.93 billion francs from the previous year's 3.06 billion francs. This decline could negatively influence investor sentiment as it shows weakened profitability in fiscal 2024. Earnings Per Share (EPS): Earnings per share were reported at 5.24 francs, down 2.3 percent from 5.37 francs year-over-year. This decrease may affect investor perceptions regarding the company's profitability. However, adjusted EPS increased to 5.70 francs from 5.42 francs year-over-year, suggesting some resilience amidst the overall decline in net income. Recurring EBIT and Margin: On a positive note, recurring EBIT grew by 6.1 percent to 5.05 billion francs, and the recurring EBIT margin improved significantly to 19.1 percent from 17.6 percent the previous year. This shows that operational efficiency is improving even if overall profitability is down. Net Sales: A 2.2 percent drop in net sales to 26.41 billion francs may raise caution among investors about top-line growth. Despite being down, sales were up 1.3 percent in local currency compared to the prior year with an organic sales growth of 0.2 percent. This indicates some resilience in pricing or volume despite overall negative trends. For fiscal 2025, the company forecasts continued profitable growth, including further improvement in recurring EBIT and margins, along with mid-single digit net sales growth in local terms. Positive forward guidance can help restore investor confidence in the company's long-term prospects. The proposed 11 percent increase in dividend to 3.10 Swiss francs per share also signals confidence in future cash flows and reflects positively on management’s outlook, which could support stock price stability.

Stocks: HCMLY HCMLF