Heidelberg Materials shuts German plant as profits hit record €3.4B
Heidelberg Materials is closing its cement plant in Paderborn, leaving 53 workers without jobs. The decision comes as weak construction demand in Germany forces cuts. Meanwhile, the company's stock has seen sharp swings, recovering slightly after a steep drop from late January's peak.
The corporation's earnings from ongoing operations climbed 6 percent to a record €3.4 billion last year. Despite falling sales volumes, strict pricing policies and cost reductions drove the gains. Its Transformation Accelerator Initiative has already saved €380 million, with a target of €500 million by the end of 2026.
A Morgan Stanley report helped lift the stock by dismissing fears over EU emissions trading changes. The analysts also called the valuation attractive, supporting a rebound. Earlier, shares had slumped by a third since late January, trading 17 percent below the 200-day average.
Geopolitical tensions also played a role in the stock's movement. Comments from Israeli Prime Minister Benjamin Netanyahu about Iran's military capabilities pushed the shares up roughly 3.5 percent. The company has also secured half its energy needs for 2026, shielding it from oil price volatility.
On the financial front, Heidelberg Materials completed a second €400 million tranche of its third share buyback programme. Investors await the full annual report on March 26, which will detail sustainability spending and further cost-cutting progress.
The Paderborn plant closure marks a direct response to Germany's struggling construction sector. With earnings at a record high but shares still under pressure, the company's next steps will be closely watched. The upcoming annual report may provide clearer insight into its long-term strategy.
