In the second quarter sales were up 5% to €4.261 billion and the current operating income up 11% to €755 million, while “strong cash generation and cost savings measures are on track.” EBITDA rose 8% to €1.007 billion
In the half-year to 30 June sales were up 5% to €7.614 billion and EBITDA was up 8% to €1.523 billion.
Current operating income at €1.022 billion was 15% up.
Lafarge says that sales increased for the quarter and year-to-date, driven by successful price actions across all product lines to respond to cost inflation.
The group achieved €170 million of cost savings in the first-half; €100 million in the second quarter, and is on track to reach at least €400 million for the year.
EBITDA and current operating income rose in the quarter and year-to-date, driven by double digit growth in Middle East and Africa, Asia, Latin America, and North America. Margins also improved both in the quarter and the first-half, up 130 basis points when excluding carbon credit sales.
The group recorded a non-recurring charge of €200 million in the second quarter for the impairment of Greek assets and recorded €148 million of restructuring charges in the first-half to implement its cost savings initiatives.
Excluding these charges, net income group share and earnings per share improved 15% year-to-date.
Net debt of €12.5 billion reduced by €1.7 billion from 30 June, 2011, and strong liquidity further improved through the issuance in July of €675 million mid-term bonds with no financial covenants and interest rates below 6%.
Bruno Lafont, chairman and CEO of Lafarge, said: “Economic conditions remain challenging for many parts of the world and we remain prudent on our outlook. But even in a lower growth volume environment, our actions to generate sales growth and cash, and to improve returns, led to a third consecutive quarter of positive trends.
“These actions will continue as we implement cost savings of at least €400 million in 2012, drive sales growth and higher margin products and services through innovation, and extract more out of our assets with strict capital discipline. We confirm our objective to secure at least €1 billion of divestments this year as part of improving returns and reducing net debt to less than €10 billion as soon as possible in 2013.”
In its outlook, overall the group says it continues to see cement demand moving higher and maintains its estimated market growth of between 1-4% in 2012 versus 2011.
“Once again, emerging markets continue to be the main driver of demand and “Lafarge benefits from its well-balanced geographic spread of high quality assets.”
“We expect higher pricing for the year and that cost inflation will increase at a lower rate than in 2011.”
Sales volumes for cement, aggregates and concrete slightly declined in the quarter and year-to-date. For cement, sales volumes decreased 3% in the quarter and 1% year-to-date, reflecting divestments and volume declines primarily in Western and Central and Eastern Europe that were partially offset by improvements in North America and Asia. Aggregates sales volumes declined by 1% in the quarter and 2% year-to-date, reflecting lower construction activity in Western Europe. Concrete volumes declined by 7% for both periods due to the sale of US ready-mix assets in the third quarter of 2011, creating a higher base comparison. On a like-for-like basis, ready-mix concrete sales volumes were stable.
