Holcim upgrades full-year guidance, seeing recovery in housing construction

By John Revill

ZURICH, July 31 (Reuters) - Swiss building materials supplier Holcim reported better-than-expected second-quarter figures and upgraded its full-year guidance on Friday, saying it was seeing more new housing projects starting up.

Residential construction in Europe has been subdued since interest rates began rising in 2022, as higher mortgage and project financing costs, elevated material and labour costs, along with planning constraints weighed on demand and led to a decline in building permits.

But the market was now beginning to recover as European governments introduced measures to support home building, Holcim CEO Miljan Gutovic said.

"There is a significant shortage that needs to be filled," he told Reuters. "According to some statistics, there is a shortage of 10 million homes," he said.

"There are measures across Europe to boost residential construction to reduce this gap," Gutovic said, referring to a French government scheme to build up to 2 million homes by 2030.

Gutovic was speaking after Holcim reported a 6.4% increase in its second-quarter sales to 4.41 billion Swiss francs ($5.46 billion), beating forecasts for 4.27 billion francs in a company-gathered consensus.

Recurring operating profit (EBIT) rose 13.1% to 1.01 billion francs, beating forecasts for 958 million francs.

Holcim, which makes cement, roofing, walling and other building products, said it now expected to achieve a 5% increase in organic sales in 2026, up from its previous view for an increase in the range of 3% to 5%.

It also expects to increase full-year EBIT by 10%, at the top end of its previous guidance.

"Usually we do not upgrade in H1, but we felt the need to show the market how confident we are about the whole of 2026,” Gutovic said.

The company's third quarter had started well in July, Gutovic said, adding the heat wave in Europe had had only a negligible impact on construction work.

Bank Vontobel analyst Mark Diethelm said the figures were a good set of results, with increased sales and recurring EBIT growth guidance a positive surprise.

($1 = 0.8070 Swiss francs)

(Reporting by John Revill, Editing by Miranda Murray, Mrigank Dhaniwala and Tomasz Janowski)