In the fourth quarter of 2011, Holcim charges extraordinary cash-neutral impairments of CHF 775 million against net income after tax.

As announced in 2007, Holcim initiated a transaction to create AfriSam (previously Holcim South Africa), the leading cement and construction materials company in the country, as part of the South African policy to support Black Economic Empowerment (BEE). Holcim sold its majority stake to a BEE-compliant consortium, and has since held a minority stake of 15 percent in AfriSam. The Group continued to support the company technically, and in 2009 subscribed to a notes issue in the amount of ZAR 2.6 billion, or CHF 292 million. As demand for construction materials has heavily decreased since 2010, AfriSam found itself forced to initiate additional financial restructuring measures in 2011. Holcim agreed to these measures yesterday after extensive negotiations. Due to this restructuring decision, Holcim is writing off investments, made up of the notes issue, accrued interest and foreign currency movements, by CHF 415 million in the fourth quarter of 2011.

As a consequence of the decrease in demand for construction materials in some regions, Holcim is making value adjustments. Since the financial crisis in 2008, cement consumption in Spain has decreased by 65 percent, in parts of Eastern Europe by 30 percent, and in the US by 45 percent. As demand for construction materials will only slowly recover, and production capacity utilization rates will remain unsatisfactory, property, plant and equipment, and goodwill impairment amounting to CHF 360 million will be charged in the fourth quarter 2011. This figure comprises CHF 328 million from Group region Europe (Spain and certain markets in Eastern Europe), and CHF 32 million from North America, related to the permanent closure of the Catskill and Artesia plants of Holcim US.

The total of these cash-neutral impairments amounts to CHF 775 million. A payout potential for the 2011 financial year (pre-impairment) remains. The Board of Directors will decide on the level of the payout at the end of February 2012, as part of the year-end financial statement to be submitted to the Annual General Meeting.

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Holcim is one of the world's leading suppliers of cement and aggregates (crushed stone, gravel and sand) as well as further activities such as ready-mix concrete and asphalt including services. The Group holds majority and minority interests in around 70 countries on all continents.
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