Holcim Ltd can look back on an impressive first half. Consolidated net sales increased by 5.4 percent to CHF 6,582 million (1st half 2000: 6,247). Operating profit was up 6.9 percent to CHF 997 million, with Group regions Latin America, Africa Middle East and Asia Pacific making key contributions to this higher result. Group net income after minority interests improved by 12.8 percent to CHF 397 million, and earnings per dividend-bearing bearer share amounted to CHF 10.56 (+10.3 percent). After peaking in the first six months of 2000, cash flow from operating activities returned to its normal growth path in the first half of 2001. It stood at CHF 617 million, compared with CHF 864 million for the year-back period. In contrast with the first half of 2000, currency fluctuations made little mark on the income statement. The positive effects of a firming dollar were almost completely offset by a weaker euro. The Group achieved an EBITDA margin of 27.2 percent (1st half 2000: 27.1 percent).
As part of the medium-term optimization of our production structure, and with a view to slower economic growth in the USA, a valuation correction of around CHF 100 million will be necessary after the commissioning of new plants and the restructuring or closure of existing facilities. With this program, Holcim is taking another significant step toward cost and environmental efficiency. Latin America will once again make a substantial contribution to Group net income, and the Africa Middle East and Asia Pacific regions will also improve on their year-back figures. Assuming little movement on the currency front, Holcim is not anticipating any significant year-on-year change in operating performance.
The scope of consolidation has undergone a number of changes, the most considerable being the first-time quota consolidation of Egyptian Cement (Egypt) and Union Cement (Philippines). Our entry into the Bangladesh market also had a positive effect. Deliveries of cement and clinker increased by 9.1 percent, sales of aggregates by 6.8 percent and deliveries of ready-mixed concrete by 5.2 percent.
The improved financial result is due to increases in sales and efficiency, as well as higher prices in some areas. The geographical distribution of operating profit shows falls in Europe to CHF 244 million (1st half 2000: 266) and North America to CHF 157 million (1st half 2000: 163). In the Africa Middle East region, operating profit posted a significant rise to CHF 111 million (1st half 2000: 30) while the Group also earned a higher operating profit of CHF 87 million (1st half 2000: 79) in the Asia Pacific region. Operating profit in Group region Latin America amounted to CHF 425 million (1st half 2000: 395).
In the first six months of 2001, Holcim made investments worth CHF 1,997 million (1st half 2000: 1,220). Financial investments, relating to acquisitions in Indonesia and Bangladesh, as well as the buyout of minority shareholdings in Group companies in Argentina, Mexico, Brazil and Canada, accounted for CHF 1,217 million (1st half 2000: 552). The remaining CHF 780 million (1st half 2000: 668) was used for investment in property, plant and equipment.
With majority and minority interests in over 70 countries on all continents, Holcim is one of the world's leading suppliers of cement, as well as aggregates (gravel and sand), concrete and construction-related services.