04 May 2012
Lafarge reports improved picture in Q1 04 May 2012
France: Lafarge has announced its financial results for the first quarter of 2012, which show a 'solid' rise in sales and operating results. Sales increased for the quarter, up by 5% to Euro3.35bn for the first quarter, driven by improved pricing across all product lines and higher cement volumes in emerging markets.
Earnings before interest, tax, depreciation and amortisation (EBITDA) and current operating income rose in the quarter, driven by higher activity in Middle East and Africa, Asia, Latin America and North America. It rose by 8% to Euro516m year-on-year. Lafarge also reported that it achieved Euro70m of cost savings and is on track to reach at least Euro400m for the whole of 2012.
"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," said Bruno Lafont, Chairman and CEO of Lafarge. "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 Euro1bn of strategic divestments this year," continued Lafont. "The management reorganisation accelerates the group's actions towards efficiency and organic growth."
In North America Lafarge recorded an EBITDA loss of Euro46m, an 38% improvement on the Euro75m loss in the first quarter of 2011. In western Europe, its EBITDA was Euro94m, down by nearly a third on the same quarter of 2011 when the EBITDA was Euro151m. Central and eastern Europe recorded a loss in terms of EBITDA of Euro14m (compared to a Euro9m loss in 2011), Latin America recorded an EBITDA of Euro59m (Euro53m in 2011) and Asia had an EBITDA of Euro108m for the quarter (Euro85m in 2011). Lafarge's most profitable region was the Middle East and Africa, which saw a first quarter EBITDA of Euro315m.
Lafarge said that it continues to see cement demand moving higher and maintained its market growth estimate of 1-4% in 2012 compared to 2011. Emerging markets continue to be the main driver of demand for Lafarge, which said that it benefits from its well balanced geographic spread of high quality assets. The group also said that it expected higher pricing for 2012 and that cost inflation will increase at a lower rate than in 2011.
HeidelbergCement increases revenue in Q1 04 May 2012
Germany: HeidelbergCement (HC) has released its financial results for the first quarter of 2012, which show a mixed overall performance. Group revenue improved by 8% to Euro2.8bn, with a 5% increase in cement sales volumes despite colder winter weather in mainland Europe.
HC reported strong growth in its North American operation, where it described the early signs of an economic recovery that had been helped by a relatively warm winter. It also highlighted strong developments and further potential in Asia, especially in Indonesia.
The group's operating income before depreciation (OIBD) decreased by 16% to Euro214m, adversely impacted by increased energy, freight and maintenance costs. It partly recovered some of its margin by the implementation of price increases.
The company reported that its three-year FOX 2013 programme for financial and operational excellence led to an improvement in cash flow of Euro39m in the first quarter of 2012. The company says that it is well on track to achieving the targeted improvement of Euro850m over three years, saving Euro384m in 2011 alone.
"The development of demand in the first quarter confirmed our outlook for the 2012 financial year," said Dr Bernd Scheifele, chairman of HC's board. "In view of high energy costs, we will unabatedly continue our efforts to reduce costs and improve efficiency under the FOX 2013 programme and increase prices in our markets in a consistent way."
"Deleveraging remains the highest priority for us in order to regain our investment grade rating," continued Scheifele. "Thanks to our advantageous geographical positioning in attractive markets in both emerging and industrialised countries... HeidelbergCement is excellently positioned to benefit over-proportionally from the continued economic growth."