Lafarge report positive half-year results

Sales and current operating income up, strong cash-generation and cost-saving measures on track

LAFARGE have reported a 5% increase in sales, to €7,614 million, for the six months ended 30 June 2012, compared with the same period last year, driven largely by successful price actions across all product lines in response to cost inflation.

EBITDA and current operating income were up 8% and 15% to €1,523 million and €1,022 million, respectively, in the first half of 2012, driven by double-digit growth in the Middle East and Africa, Asia, Latin America and North America.

The Group also achieved €170 million of cost savings in the first-half of 2012, €100 million in the second quarter, and is on track to reach at least €400 million for the year. Net debt of €12.5 billion has been reduced by €1.7 billion since 30 June 2011.

Bruno Lafont, chairman and CEO of  Lafarge, said: ‘Economic conditions remain challenging for many parts of the world and we remain prudent on our outlook. But even in a lower growth volume environment, our actions to generate sales growth and cash, and to improve returns, led to a third consecutive quarter of positive trends.

‘These actions will continue as we implement cost savings of at least €400 million in 2012, drive sales growth and higher-margin products and services through innovation, and extract more out of our assets with strict capital discipline.’

Mr Lafont also confirmed the company’s objective to secure at least €1 billion of divestments this year as part of improving returns and reducing net debt to less than €10 billion as soon as possible in 2013.

Looking ahead, Lafarge continue to see cement demand moving higher and maintain their estimated market growth of between 1 to 4% in 2012, compared with 2011. The Group also anticipates higher pricing for the year and that cost inflation will increase at a lower rate than in 2011. Emerging markets are expected to continue to be the main driver of demand.