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Lafarge reports a 5% sales increase in 2Q12

World Cement,

Lafarge has released its results for 2Q12 and for the first half of the year. Overall, cement sales increased by 5% to €4.26 billion in 2Q12, whilst sales for the first half of the year also rose by 5% to reach €7.61 billion. In 2Q12, Lafarge’s operating income grew by 11% to €755 million and the company achieved cost savings of €100 million.

Cement sales volumes fell from 39.5 million t in 2Q11 to 38.4 million t in 2Q12, and dropped by 1% in the first half of the year. The decline has been attributed to lower volume sales in Europe, despite positive results in North America and Asia. The sale of the company’s ready-mix concrete assets in the US impacted sales, which fell by 7% to 8.6 million m3 in the last quarter. Volumes of aggregate sales also fell by 1% in the quarter due to the slowdown in construction in Western Europe.

North America presented the most positive results in terms of EBITDA, increasing 105% in the first half of the year and 24% in the second quarter. Asia came in second with 33% y/y in 2Q12, rising from €120 million to €159 million. Latin America, the Middle East and Africa also posted double digit rises, growing by 13% and 10% y/y, respectively. However, EBITDA fell by 5% in Western Europe and 21% in Central and Eastern Europe.

“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,” said Bruno Lafont, Lafarge Chairman and CEO.

“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.”

Adapted from press release by Louise Fordham.

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