PARIS--French cement maker Lafarge SA (LG.FR) Friday said its
net profit in the second quarter rose slightly as cost-cutting
offset adverse currency factors.
The company said its net profit rose 2% to 205 million euros
($277 million), while sales dipped 5% to EUR3.37 billion. Excluding
the effects of recent asset sales, sales revenue rose 3%, the
company said.
Analysts polled by Factset expected an average net profit of
EUR244 million during the quarter on EUR3.43 billion sales.
Currency swings chopped Lafarge's top line by a EUR224 million,
the company said.
The company's chief executive Bruno Lafont attributed rising
profitability to cost-cutting during the quarter and innovation
that allowed savings worth EUR165 million in the period. He
reiterated the company targets EUR600 million in savings during the
year.
During the second quarter, sales in emerging markets were
strong, the North American market improved and the company observed
a recovery in some European markets such as Greece, Poland and the
U.K., Mr. Lafont said.
Mr. Lafont reiterated his forecast for an increase in market
growth of between 2% and 5% in 2014. He repeated the company
expects to cut net debt to below EUR9 billion from EUR11.2 billion
at the end of June 2013. Lafarge is still recovering from the
financial crisis in 2008-2009 when the weight of its debt
threatened its operations.
Last month, Lafarge and rival Holcim announced a plan to merge
their operations. The two companies said they plan to sell assets
that generate about EUR5 billion in annual earnings before
interest, taxes, depreciation and amortization. In a bid to get
clearance from antitrust authorities and boost overall exposure to
emerging markets. About two-thirds of the expected divestments are
likely to occur in Europe.
Mr. Lafont said the future partners are in talks with potential
buyers but declined to provide further detail. He expects the
merger to be completed in the first half of 2015.
Write to Inti Landauro at inti.landauro@wsj.com
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