Lafarge

Lafarge's turnover advanced by 2.4% in the first nine months to €11,471m, but including the gypsum division, much of it was sold in November, turnover edged up 1% to €12,210m. The ongoing EBITDA fell by 10.1% to €2419m while the trading profit was down by 12.3% to €1641m. Net financial charges were 0.5% lower at €649m, giving a pre-tax profit 26.9% lower at €892m and the net attributable profit was down by 22.1% to €596m. Net debt at the end of September was reduced by 2.7% to €14,262m, resulting in a gearing level of 80.4%, compared with 83.1% a year earlier. Capital investment was 9.1% lower at €892m. For the full year, capital expenditure should amount to approximately €1200m and it is the group's intention to keep this below €1000m in 2012. The sale of 80% of the European and Latin American gypsum business to Etex for €850m has just been completed and the completion of the sale of the Asian gypsum operations to Boral should take place next month.

Group cement deliveries advanced by 7.4% to 108.8Mt while the turnover from cement advanced by a more modest 2.5% to €7960m and the EBITDA fell by 9.9% to €2081m. Turnover in aggregates and concrete improved by 2.5% to €3929m, but the EBITDA declined by 6.7% to €335m, though at the trading level there was a 1.2% advance to €165m. Aggregates deliveries were 1% lower at 143.6Mt, but the turnover did improve by 4.9% to €1613m though the EBITDA was down by 6.3% to €224m. Ready-mixed concrete deliveries eased by 0.4% to 25.5Mm³, giving a turnover 0.3% higher, but the EBITDA declined by 15.9% to €74m.

European cement deliveries recovered by 4.1% to 25.3Mt, with turnover improving by 3.5% to €2125m but the EBITDA came off by 2.8% to €657m. The sale of emission permits generated a profit that was 20.8% higher at €157m. Volumes advanced by 14% in Central and Eastern Europe, but in the west there was a 1% decline. In France, cement deliveries recovered by 2.9% while prices, the highest in the EU, eased somewhat. Spanish volumes fell by a further 11.3%, and prices came off a little further, with turnover dropping by 12.9%. In the UK, volumes grew by 7.9% with pricing being pretty stable. In Greece, domestic deliveries dropped by 28%, the third year in succession with a drop in excess of 20%, but pricing has held up remarkably well, being off by just 3.5%. Poland showed the strongest volume performance, with a 23.6% increase. Romanian volumes recovered by 3.4%, while in Serbia volumes recovered by 6.5% though prices showed some weakness. Russian volumes have shown a 9.1% recovery in the period, with prices advancing very strongly. The trading profit from the western European concrete and aggregates operations recovered strongly and rose by 19% to €69m in spite of volumes being 4.2% lower at 45.6Mt. Ready-mixed concrete deliveries fell by 9.0% to 9.1Mm³.

Middle Eastern and African turnover declined by 1.6% to €2909m. Cement deliveries improved by 8% to 32.6Mt but the cement turnover was a marginal 0.2% lower at €2673m giving an EBITDA 10.4% lower at €837m. The strongest growth was seen in Nigeria, where a new 2.5Mta cement works has been commissioned, and Algeria, with volume growth of respectively, 29.2% and 19.7%. Iraqi volumes grew by 4.9% and more modest advances were seen in Kenya (+1.8%) and Morocco (+0.7%). On the other hand, volumes dropped by 24.6% in the increasingly-competitive Jordanian market, where two kilns were mothballed, and in Egypt, where the number of competitors is growing, with volume reduction of 16.4% and a considerable pressure on prices. The first kiln in Saudi Arabia has been commissioned, while in South Africa, volumes declined by 0.4% in cement and by 4.9% in ready-mixed concrete.

The total North American turnover came off by 2.2% to €2309m, excluding the de-consolidated plasterboard business. In cement, the turnover declined 4.2% to €967m and the EBITDA dropped by 23.5% to €130m and at the trading level the drop was 45% to €36m. Cement deliveries were virtually unchanged at 10.2Mt, with volumes declining by 1.1% in the USA, but advancing by 4.3% in Canada. Pricing was weaker, declining by 3.8% in the USA but by just 0.2% in Canada. North American aggregates volumes declined by 1.9% to 70.6Mt but ready-mixed concrete deliveries improved by almost 4% to 5.4Mm³.

Asian turnover improved by 3.2% to €1849m for the remaining group and by 1.6% to €1546m in cement. Cement shipments improved by 7.2% to 32.9Mt, but the EBITDA dropped by 24.3% to €281m. Volumes rose by 23.2% in China, by 13.9% in Indonesia and by 5% in Malaysia, with smaller increases in India and South Korea. Only in the Philippines did volumes decline, by 4.4%. Cement prices rose in China and in South Korea, but weakened in India and in the Philippines. Ready-mixed concrete deliveries in India advanced by 9.1% and pricing improved.

Latin American turnover advances by 31.1% to €771m, of which cement accounted for €655m, an increase of 28.7%. Cement deliveries were boosted by last year's Brazilian acquisition, and rose by 32.2% to 7.8Mt, while the EBITDA was up by a more modest 10.7% to €176m and actually fell by some 5% at the underlying level. Cement volumes improved by 4% in Brazil and by 13.8% in Ecuador.

Lafarge's joint venture partner MerchantBridge & Co has announced that the partnership will expand the capacity of the Karbala works from the current 0.58Mta to in excess of 1.8Mta by 2014. When Lafarge and its partner took at 15-year lease on the Karbala plant in 2010, production was running at an annual rate of about 0.3Mta.

Lafarge is to build a 2Mta cement works in the Jazak region in central Uzbekistan in partnership with the state-controlled Uzstroymaterialy. Construction of the new cement works is supposed to be starting during the second half of this year. At present, the Uzstroymaterialy subsidiary Kyzykumcement is the leading producer with a market share of approximately 40%. Uzstroymaterialy also holds a 25% interest in a 1Mta cement works being built for completion in 2013. It is assumed that Lafarge will aim to market some of the cement from the new works in Russia.