France: Lafarge has reported that its sales have risen by 4% to Euro4.39bn in the first nine months of 2012, compared to Euro4.21bn in the same period of 2011. However, the French multinational cement producer's profits are still suffering due to restructuring charges and an impairment in the second quarter. So far in 2012 Lafarge's net income has fallen by 44% to Euro332m from Euro596m. For the third quarter of 2012 net income fell by 5% to Euro319m from Euro336m.
Lafarge's earnings before interest, taxes, depreciation and amortisation (EBITDA) for its cement business rose by 5% for the first nine months of 2012 to Euro2.22bn from Euro2.08bn in 2011. Cement sales increased by 3% to Euro7.90bn from Euro7.49bn. Cement volumes declined by 2% to 106Mt from 109Mt. For the third quarter of 2012 cement volumes declined by 4% year-on-year to 36.6Mt from 38.2Mt in 2011. Lafarge attributed this to the construction slowdown in Europe, unfavourable third quarter weather conditions in the central United States and the sale of some of its US assets to Eagle Materials in October 2012.
"Our actions to generate sales growth and cash, reduce debt and improve returns led to a fourth consecutive quarter of positive trends even in a lower growth volume environment. These actions will accelerate as we implement Euro550m of innovation and cost savings initiatives in 2013 of our four year, Euro1.75bn additional EBITDA plan," said Bruno Lafont, chairman and chief executive officer of Lafarge.
By region cement volumes declined by 10% in north America to 4.1Mt year-on-year in the third quarter of 2012 from 4.5Mt. Western Europe saw a decline of 12% in the third quarter to Euro4.2Mt from Euro4.9Mt. Lafarge's central and eastern Europe region saw a drop of 8% to 4.5Mt from 4.7Mt. In Poland the group blamed a slowdown on the aftermath of the European Football Championship in June 2012. In Russia a production 'limitation' at a plant near Moscow caused problems. In the 'Middle East and Africa' region volumes fell by 4% to 10.8Mt from 11.4Mt.
In Latin America cement volumes rose by 5% to 2.4Mt from 2.3Mt. Cement sales in the region were led by a 12% boost in Brazil. In Asia volumes rose by 3% to 10.6Mt from 104Mt. Lafarge singled out a 25% increases in domestic cement sales in India, 11% in the Philippines and 14% in Indonesia. Despite increases in volumes in China, Lafarge noted that cement sales were impacted by slower construction growth and increased competition.
In its outlook Lafarge concluded that it expects to see cement demand growing from 1-4% in 2012 driven by emerging markets. The group will hold its target of reducing net debt to below Euro10bn as soon as possible in 2013.
