By Inti Landauro

PARIS--Recently merged cement behemoth LafargeHolcim (LHN.VX) Wednesday said it expects its profitability to increase this year and next as synergies from the two combined businesses--France's Lafarge and Swiss Holcim--start to bear fruit.

The company expects to cut costs by around 100 million Swiss francs ($103.8 million) this year and reduce capital expenditure by CHF200 million from what both companies previously had planned to invest, LafargeHolcim's newly appointed Chief Executive Eric Olsen said.

The company also expects to lower its combined net debt by CHF6 billion to CHF15 billion by the end of the year through asset sales.

Mr. Olsen confirmed the merger is expected to lead to annual savings worth EUR1.4 billion after three years and EUR1 billion on its earnings before interest, taxes, depreciation and amortization.

LafargeHolcim was created earlier this month from the merger of two of the world's largest cement companies, to create a giant with sales above 40 billion euros ($44.2 billion).

The two companies announced their link-up last year and the process to get the merger approved by regulators and shareholders took a little more than a year. After a row over the exchange ratio and leadership of the combined company in April and May--which almost led to the collapse of the deal--the merger eventually went ahead and Lafarge shareholders tendered their shares earlier this month in exchange for Holcim shares.

Write to Inti Landauro at inti.landauro@wsj.com

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