France: Lafarge has posted a net loss in the fourth quarter of 2011 due to higher prices of its raw materials and energy, negative currency swings and a write-off of Euro285m on assets, mainly in Greece.
Lafarge posted a Euro3m net loss for the quarter ending 31 December 2011 compared with a net profit of Euro62m for the same period in 2010. Sales rose 5% in the same period to Euro3.81bn from Euro3.63bn a year earlier.
Overall for the full year in 2011 Lafarge posted a net income of Euro593m, a drop of 28% compared to Euro827m in 2010. The income drop occurs in the same year when Lafarge sold its gypsum assets, generating a net gain of Euro266m. Sales rose 3% for the year to Euro15.3bn from Euro14.8bn in 2010. The company achieved its target to reduce net debt by Euro2bn, taking the figure down from Euro14bn in 2010 to Euro12bn in 2011.
Cement sales were driven by emerging markets in the Middle East and Africa, Central and Eastern Europe, Latin America and Asia. In these regions sales increased by 6% to Euro7.69bn in 2011 from Euro7.16bn in 2010. This represents more than two-third of cement sales for the company.
Yearly sales in Asia grew by 3% to Euro2.1bn in 2011, despite the depreciation of most of the Asian currencies against the Euro. Notably in the fourth quarter sales increased by 15% in Central and Eastern Europe, rising to Euro220m in 2011 from Euro192m in the same period in 2010. This was attributed to improved market situations in Russia and Poland and overall mild winter weather conditions.
Mature markets experienced contrasted trends, with volume growth in Canada, UK and France, stable volumes in the United States, and Greece and Spain still impacted by the difficult economic environment.
Lafarge expects that costs of raw materials will rise at a slower pace in 2012 than in 2011 and sees demand for cement rising between 1% and 4%. It also expects it will be able to raise its prices as demand for cement increases, mainly in emerging markets. Lafarge expects to further reduce its debt thanks to cost-cutting plans and further divestments of more than Euro1bn in 2012.
