Lafarge intends to cut more debt

Lafarge intends to cut more debt
Published: 22 November 2010

Lafarge, the world’s biggest cement maker, is focused on improving profit and cutting debt in the next 18 months as it cuts investment and costs and steps up asset sales, Chief Financial Officer Jean-Jacques Gauthier said to reporters from Bloomberg. “Post-crisis” margins should be “even better” than pre-crisis margins because of cost cuts, the CFO said. He didn’t say when that “post-crisis” period would be reached. The company is trying to keep its investment-grade credit rating. Europe’s most indebted cement maker inflated borrowings when it paid US$15bn for Orascom Construction’s cement operations at the start of 2008, just before a construction slump in Europe and North America.

Lafarge will be “pragmatic, by both taking into account its will to improve the group’s financial structure, and its will to stand by its investors and continue the payment of a sound dividend,” Gauthier said at a conference today in Paris, where the company is based. In the past, the payout has averaged 40%, he said, adding that “it’s not a policy.”