LafargeHolcim, the giant French-Swiss building materials group, expects to shake off a "massive slowdown" in China caused by the coronavirus with a rebound in Chinese demand later in the year and strong sales in other regions.
“What we are experiencing at the moment is a massive slowdown in China, however most of our cement plants are running again in China,” CEO Jan Jenisch told reporters on Thursday.
Infrastructure and other building projects in China may have been postponed, Jenisch said, but he expected that to bump demand to later in the year.
“According to the World Health Organisation, we expect a recovery starting in May in the China market,” he said.
Jenisch said operations in other countries had not been affected by the spread of the virus, adding: “At the moment construction sites and infrastructure as well as our plants are fully running everywhere in Europe, in North America, Latin America, India and Africa,” he said.
The world’s biggest cement maker on Thursday reported 2019 net income up nearly 50% to CHF 2.25bn (US$2.3bn), just ahead of estimates for CHF 2.21bn, Refinitiv Eikon data showed.
The profit increase was driven by lower restructuring costs, lower financial expenses and a reduced tax rate, LafargeHolcim said.
Stripped of impairment charges and gains from divestments, net profit was up 32% to CHF 2.07bn, the highest since the company was formed in 2015.
Sales fell 2.7% to CHF 26.72bn versus analyst forecasts of CHF 26.79bn.
This year it expects sales to rise by 3%-5% and set its recurring operating profit growth target at at least 7%.
LafargeHolcim’s operations in China do not supply other countries and although the company has taken precautions such as travel controls it did not expect the downturn to affect its overall figures for the year.
Jenisch said: “We have had a great start to the year in all our five regions, we have no indications of a slowdown at this point in time, we have full order books.”
