LafargeHolcim doubles H1 profit

Cement manufacturing giant LafargeHolcim posted net income of CHF780m (US$787.96m) in the first half of 2019, up by 110% on the CHF371m (US$374.78m) figure for H1 2018.

Net sales totalled CHF13,059m (US$13,192.2m) in the first half of 2019, growing by 3.5% like-for-like compared to the prior-year period. The Swiss-based company said this achievement has been driven by successful pricing management and higher cement volumes. Net sales grew in all regions supported by a favourable market environment in general, in particular in Europe and North America.

The company says it is on track to reach its targets for the second half of the year, with solid global market demand expected to continue in 2019.

LafargeHolcim anticipates continued market growth in North America, softer but stabilising cement demand in Latin America, continued demand growth in Europe, stabilising market conditions in Middle East Africa, and continued demand growth in Asia Pacific.

The company confirmed its 2019 target of net sales growth of 3-5% on a like-for-like basis.

CEO Jan Jenisch commented: “We have achieved a strong first half of the year and successfully continued our profitable growth strategy. All business segments have contributed to this success and to the continued over-proportional growth in profitability.

“Our financial discipline resulted in strong progress in cash flow and a significant reduction in debt. We are executing our Strategy 2022 – ‘Building for Growth’ at full speed and we are confident that we will achieve our targets for 2019.”

LafargeHolcim says that Europe delivered very good results during the first half of 2019 supported by good market dynamics across the region. Net sales grew by 7.2% while recurring EBITDA (earnings before interest, tax, depreciation and amortisation) was up 17.1% on a like-for-like basis. Both price increases and improved operational efficiency were the main drivers of this strong margin growth.

In North America, net sales were impacted by weather and flooding in the US during Q2. Net sales grew by 2.8% for the half-year and Recurring EBITDA improved slightly by 1.0% on a like-for-like basis. A strong order book and positive price momentum in the US are expected to support improvement in the second half of the year.

In Latin America, net sales improved by 3.1% and recurring EBITDA decreased by 4.1% on a like-for-like basis in a softer market environment.

The Asia Pacific region showed strong recurring EBITDA growth, with price improvement and costs savings in India. China continued to contribute solidly to the region’s positive result. Net sales grew by 2.1% and recurring EBITDA grew by 17.4% in the first half of 2019 on a like-for-like basis.

In Middle East Africa, LafargeHolcim said the turnaround has been successfully achieved in Q2: recurring EBITDA increased by 1.9% on a like-for-like basis. It added that Nigeria delivered a solid performance, Iraq showed further signs of recovery and Algeria is stabilising. For the first half of 2019 net sales grew by 0.3% on a like-for-like basis, while recurring EBITDA decreased by 6.6%.

This article first appeared on our sister title Aggregates Business.


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