Lafarge has reported a 6% increase in 1H15 EBITDA thanks to favourable exchange rates, and a €250 million gain through cost-cutting and innovation measures.
Cement sales volumes were down 3% y/y in 2Q15 on a like-for-like basis, which the group attributes to a decrease in export sales. Positive developments were noted in Canada, Romania, the Philippines and several countries in the Middle East and Africa. New capacities in India and Russia offset the impact of adverse weather in the US, subdued markets in France and Brazil and challenging conditions in Iraq and Syria.
EBITDA was 1% higher in 2Q15 supported by favourable exchange rates that more than offset the impact of divested businesses. On a like-for-like basis, EBITDA was down 2%, mitigating the positive effect of cost-cutting and innovation measures.
Adjusted net income in 1H15 was up 57% excluding one-off items including €450 million of impairment on some of the assets to be divested to CRH in 3Q15. These losses will be offset by the gains on other assets included in the transaction.
Net debt stands at €10.3 billion. Cash flow from operations before merger costs benefitted from the reduction in cash financial expenses in 2Q15, up 17% to €355 million.
Outlook
Lafarge expects cement demand to increase overall in the full year, with market growth of 1 – 4% y/y. Cost inflation is expected to continue at a slower pace than in 2014, which should result in higher prices overall. The group is targeting €550 million of additional EBITDA per year from its cost reduction and innovation measures.
Adapted from press release by Katherine Guenioui