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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