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Heidelberg Materials Raises 2023 Guidance Amidst Strong Orders and Lower Energy Prices

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Heidelberg Materials, a German building materials group, has revised its 2023 guidance upwards due to a surge in orders for infrastructure projects and certain sectors of commercial construction. This positive development comes as energy prices have eased.

In the second quarter, the company’s result from current operations before depreciation and amortization reached €1.23 billion ($1.36 million), surpassing both the prior-year period’s €1.13 billion and the company-compiled consensus forecast of €1.22 billion. Additionally, the quarterly result from current operations rose by 14% to €931 million.

Despite a decrease in construction activity, particularly in residential construction, due to inflation and higher financing costs, quarterly revenue still experienced a 1% YoY growth—or a 4.6% growth on a like-for-like basis—to reach €5.58 billion. Notably, this growth occurred despite lower volumes linked to the decline in construction activity.

The company’s margin for current operations before depreciation and amortization in the quarter stood at 16.7%, an improvement from the 14.8% reported during the same period last year.

Due to these positive developments, Heidelberg Materials has upgraded its 2023 outlook. The new forecast expects the result from current operations to fall between €2.7 billion and €2.9 billion, up from the previous range of €2.50 billion to €2.65 billion. In addition, the company still anticipates a moderate increase in revenue compared to the previous year, excluding consolidation and exchange rate effects.

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