UPDATE 2-Holcim braces for austerity pinch after H1 miss

* Holcim H1 net income 331 mln Sfr after minorities

* Poll average for net income was 469 mln Sfr

* Sees few signs of global economic recovery

* CFO Schlatter to retire in March, replacement named

* Shares slump 4.5 percent, underperform sector

(Adds CFO retirement, trader comment, shares)

By Catherine Bosley

ZURICH, Aug 19 (BestGrowthStock) – Holcim (HOLN.VX: ), the world’s
second-biggest cement maker, warned government austerity
programmes would limit infrastructure spending in the months
ahead and posted disappointing first-half earnings.

Cuts to government spending in Europe and North America —
which together accounted for 42 percent of net sales in the
first half — are hitting demand there, Chief Executive Markus
Akermann said on Thursday.

Pricing pressure in countries such as Spain and Italy
coupled with government austerity schemes prompted concern that
gains from emerging markets would be offset even as Asia, Latin
America, Africa, and the Middle East do well.

Its shares fell 4.5 percent to 64.65 francs by 1004 GMT,
lagging an 0.3 percent dip in the sector index (.SXOP: ).

“It’s the outlook, which is very, very cautious and also the
message that pricing pressure is increasing,” analyst Maud
Penillard at Bank of America Merril Lynch said.

“One cannot speak of a global economic recovery. Elements of
uncertainty still exist and make forecasting difficult. These
include high levels of government debt, which are limiting
further stimulus programs, particularly in Europe,” the Swiss
company said in a statement.

Holcim said it would focus on containing costs to insulate
its bottom line, but the market was sceptical.

“If a company wants its save its way to success, that shows
that margin problems could result,” one trader in Zurich said.

“No sign of global recovery,” another trader said, adding he
had sold Holcim shares on the dour outlook.

Holcim’s first-half net profit fell 37 percent to 331
million Swiss francs ($317.7 million) following a 186 million
franc charge for restructuring operations in North America to
save on local taxes.

The result, which follows a loss last quarter, was below
analyst expectations for 469 million. [ID:nLDE67G161]
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a graph on Holcim, click on: http://r.reuters.com/fet85n For an analysis on infrastructure stocks see [ID:nLDE67B0DR] For companies coping with austerity see [ID:nLDE67G0FY] For a story on FLSmidth results see [ID:nLDE67I09Z] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Infrastructure companies have benefited from government
stimulus packages but state budget belt-tightening is set to
weigh on earnings in the sector. [ID:nLDE67B0DR]

No. 1 cement maker Lafarge (LAFP.PA: ) last month reported
falling first-half sales and profits and cut its 2010 estimate
for cement demand given the uncertain pace of economic recovery.
[ID:nLDE66S1YO]

The Asia-Pacific region generated around 37 percent of
Holcim’s first-half sales, and the Zurich-listed group which
also competes with Mexico’s Cemex (CX.N: ) and Germany’s
HeidelbergCement (HEIG.DE: ) expected demand there to grow.

The group, which will supply cement for the 2012 London
Olympics, announced Theophil Schlatter, chief financial officer
since 1997, would retire in March. Thomas Aebischer, the finance
chief for U.S. operations, will replace him.

“They have a comfortable level of debt and I don’t see a big
worry on the balance sheet,” said Penillard of Bank of America
Merril Lynch. “It’s not a non-event but I think it has neutral
impact.”

Earnings from Austrian brick maker Wienerberger (WBSV.VI: )
and Portuguese cement maker Cimpor (CPR.LS: ) beat forecasts this
week, with Cimpor saying business was boosted by growth in
Brazil. [ID:nLDE67G0FY]
(Additional reporting by Rupert Pretterklieber; Editing by
Michael Shields)
($1=1.042 Swiss Franc)

UPDATE 2-Holcim braces for austerity pinch after H1 miss