Lafarge has cut its growth forecast following a drop in first quarter earnings, attributable to inflation and recent events in Egypt. In a statement released on its website, Lafarge said that it estimates market growth of between 2 to 5% this year versus 2010. In February the Group estimated growth of between 3 to 6%. Overall pricing is expected to move higher for the year in the context of a higher cost inflation environment.
The Group’s current operating profit fell 5% to €224 million, while operating income in its cement division was down 10%.
Lafarge received €11 million from asset sales in the first three months of 2011 and it plans to cut its debt by €2 billion this year in an attempt to improve its financial profile following the purchase of Egyptian company Orascom Cement in 2007.
Lafarge confirmed that the emerging markets continue to be the main driver of demand. For developed markets, the Group expects that demand will continue to recover.
The Group states that it is positioned for earnings growth this year and is on track to achieve more than €2 billion of deleveraging and €200 million of structural cost savings in 2011.
In February 2011, Lafarge and Anglo American plc announced an agreement to combine their cement, aggregates, ready-mixed concrete, and asphalt and contracting businesses in the UK. The completion of this transaction, which will form a 50:50 joint venture, is conditional upon regulatory approvals. The Group’s investments totaled €302 million for the quarter, compared to €384 million in 2010.
Read the article online at: https://www.worldcement.com/europe-cis/05052011/lafarge-cuts-growth-forecast/