Geberit Faces Profit Challenges Due to Rising Material Costs
ZURICH (Reuters) – Geberit is seeing “significant challenges on the raw materials markets”, the Swiss building supplies company said on Wednesday, as higher costs weighed on profit growth during the third quarter.
The maker of piping and bathroom ceramics reported sales rising 7.6 % to 854.8 million Swiss francs ($935.5 million)during the three months to the end of September.
But operating profit rose only 1.5% to 230.7 million francs as the costs for its raw materials surged 15.6% during the period, Geberit said.
Other construction companies have warned about higher raw material costs weighing on their profitability even as they see a resurgence in building activity after the pandemic shutdown last year.
Geberit expects prices for its raw materials to rise by around 3% in the fourth quarter compared with the third quarter. It also expects increases in energy prices to have a negative effect.
The company, whose results are seen as a proxy for the wider construction industry, uses metals like aluminium and zinc, plastics and ceramics in its products, which are used in new-build and refurbishment projects.
($1 = 0.9137 Swiss francs)
(Reporting by John Revill; Editing by Riham Alkousaa and Michael Shields)
