Lafarge shows solid increase in sales/operating results
First publishedon www.AggBusiness.com
Lafarge’s first quarter figure show that the group’s sales were up 5% to €3.353 billion and that net income group share improved to €18 million.
EBITDA was up 8% to €516million while the current operating income was up 28% to €267 million.
The company says that first quarter results reflect seasonality, traditionally leading to lower net results relative to other quarters in the year.
The increase in EBITDA and current operating was, driven by higher activity in Middle East and Africa, Asia, Latin America, and North America, and the group also achieved €70 million of cost savings and is on track to reach at least €400 million for the year.
Net income group share and earnings per share improved when excluding the first quarter 2012 restructuring charges of €94 million taken as part of implementing the cost reduction program.
Earlier this week the UK Competition Commission approved the proposed joint venture between Lafarge’s UK operations and Tarmac, subject to a number of conditions which both parties are confident can be met.
The group also implemented its new country-based organisation in the first quarter which it says will accelerate organic growth and innovation as well as reinforce efficiency.
Bruno Lafont, chairman and chief executive officer of Lafarge, said: “While the first quarter results traditionally represent a small quarter and we remain cautious for the year, the Group was encouraged by the higher revenues and EBITDA growth. We successfully launched our new cost reduction programme and it is positive that price actions are taking hold to address cost inflation.
“The group is focused on debt reduction, strict cost discipline, the maximisation of its cash flows, and the achievement of at least €1 billion of strategic divestments this year. The management reorganisation accelerates the group’s actions towards efficiency and organic growth.”
Overall the group says it continues to see cement demand moving higher and maintains its estimated market growth of between 1-4% in 2012 versus 2011.
Emerging markets continue to be the main driver of demand and Lafarge benefits from its “well-balanced geographic spread of high quality assets.”
Lafont said: “We expect higher pricing for the year and that cost inflation will increase at a lower rate than in 2011.”