North / South America
Lafarge takes Greece hit - keeps outlook
Jul, 27 2012
(Paris, France) -- Lafarge (LAFP.PA) reported improved second-quarter sales and operating profit on Friday, but net income plunged as the French cement maker took a 200 million-euro hit to cut the value of its Greek assets.
The company also confirmed it continues to see higher cement demand and reiterated its targets to secure at least 1 billion euros ($1.23 billion) of divestments this year and cut net debt to less than 10 billion as soon as possible in 2013.
Its net debt at the end of June shrunk by 1.7 billion euros compared with a year ago to 12.5 billion.
Lafarge said it continued to expect the market to grow between 1 and 4 percent in 2012 compared with 2011, with emerging countries the main driver for growth.
The company has been selling non-core assets - among them its European and South American gypsum units - and refocusing on its core cement and concrete business after losing its investment-grade debt rating last year.
Lafarge became heavily indebted after paying 10.2 billion for Orascom Cement, the largest cement maker in the Middle East, in 2007.
Although there were no significant disposals in the second quarter, Chief Executive Bruno Lafont told reporters he remained confident Lafarge would sell assets worth at least 1 billion euros by the end of 2012.
"We are currently working on a certain number of projects," he said.
Excluding charges, net profit was stable at 294 million euros. But it slumped 80 percent to 57 million as the company took a 200 million charge to write down the value of its Greek assets and booked restructuring charges of 54 million as part of its cost savings plan.
Lafarge, which has pledged to cut costs and sell assets to slash its debt, is targeting savings of at least 400 million euros this year.
Sales in the quarter rose 5 percent to 4.26 billion euros, lifted by price hikes, higher cement volumes in North America and Asia, and the weaker euro.
Lafarge shares, which have risen around 33 percent since the start of the year, closed at 36.17 euros on Thursday. ($1 = 0.8130 euros)
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