Financial Performance of Holcim-Azerbaijan Sharply Deteriorated

JSC Holcim (Azerbaijan) announced the financial report for 2015, tracked by the audit report, which was presented by Ernst & Young Holdings (CIS) B.V.

According to the report, after two years of high dividend policy, the company suffered a net loss in the amount of 99.1 million manats, while by the end of 2014 the net profit of the company amounted to 39.7 million manats.

The bulk of the losses (89.7 million AZN) were formed as a result of exchange rate differences. But how it happened was not mentioned in the report. The company buys the bulk of raw materials and sells the finished products in the country.

In 2015, the sales of cement by the plant totaled 84.6 million manats, decreasing by 50 million AZN or 37%. The expenses included in the cost of production (51.4 million manats) decreased by only 5 million manats.

In 2015, the company for some unclear reasons increased administrative expenses (43.6 million manats) by 31 million manats.

From the financial report it can be assumed that JSC Holcim (Azerbaijan) borrowed a certain loan from its shareholders in 2015. During the year, the size of long-term loans received from companies related with the JSC grew from 69.4 million to 167.5 million AZN and the amount of short-term loans increased from 15.3 million to 27.6 million manats.

Holcim (Azerbaijan) is controlled by Lafarge Holcim (66%). EBRD owns 10% of the shares of the Garadagh cement plant. ------08D