Lafarge’s European & American operations pull down 1Q results

Lafarge’s European & American operations pull down 1Q results
Published: 07 May 2009

Cement shipments in the quarter were off by 10.3% to 31.3Mt, while turnover from cement declined by 8.6% to €2,335m and the EBITDA emerged 9.5% lower at €573m.  The aggregates tonnage was down by 21.6% to 36Mt, generating a turnover 20.7% lower at €368m and a €3m loss at the EBITDA of level, while ready-mixed concrete volume declined by around 5% to 8.8Mm³, representing a turnover of €695m and an EBITDA of €187m.  Lafarge’s global gypsum volumes declined by 14.6% to 163Mm², with turnover down by 9.2% to €349m and the EBITDA some 5% lower at €37m.

The European cement turnover suffered a 29.7% decline to €1,282m, with the EBITDA falling by 49.8% to €125m.  Cement shipments fell by 33.7% to 6.7m tonnes. In France, cement volumes fell by 21.4% but average prices improved by 3.2%.  British cement shipments dropped by 39.4% but prices still improved in high single figures. Spain recorded the worst performance, with a 47.1% drop in volumes and here prices also declined, by around 2.4%.  Greek volumes were off by 29.6% but prices improved by 3.2%.  German volumes fell by 24.6% while prices continued to improve and rose by an average 5.4% before adjusting for changes in the mix.   In Poland, cement volumes fell by 27.9% but prices were 5.7% higher.  Romanian volumes dropped by 44.8% and Serbian shipments by 36.3%, but in both markets prices were ahead.  This was not the case in Russia where prices dropped by more than 22%, with cement deliveries falling by 27.8%.  Volumes also declined in the Ukraine, with prices being under some pressure.  

North American cement turnover fell by 20.7% to €211m and a €27m loss was incurred at the EBITDA level, compared with a €13m profit.  Cement shipments fell by 27.2% in Canada and by 25.9% in the United States to reach 2.1m tonnes.  Cement prices were almost stable in the USA and improved by 3% in Canada.  North American aggregates volume declined by 32.1% to 12.7m tonnes and the turnover was off by 20.7% to €368m while in ready-mixed concrete, volumes fell by around 28% to 1.3m m³ and the turnover declined by 24.2% to €138m.  Cement turnover in Latin America declined by 14.3% to €156m and the EBITDA was off by dome 15% to €44m as cement volumes were down by around 10% to 1.9m tonnes.  The reduction in volume and turnover were negatively affected by the nationalisation of the Venezuelan assets, and at the underlying level, turnover did improve by around 5%.  In Brazil, volumes improved by 2.7% and prices continued to recover, while in Chile volumes dropped by 21.8%, though average prices showed some improvement.

The Middle and Near East cement operations, which had been considerably expanded through the acquisition of Orascom, increased turnover by 48.8% to €332m, while the and the EBITDA advanced by one third to €124m as cement shipments advanced by around 17% to 4.9m tonnes.  With the exception of Turkey, which saw volumes decline by 23.2% and prices falling, the environment was generally positive, with volumes rising by close to 9% in both Egypt and Jordan and jumping by 49.9% in Iraq.  African turnover rose by 3.0% to €594m and the EBITDA advanced by 41.4% to €191m.  Cement deliveries rose by around 9% overall, with the strongest increases being seen in Kenya (+34.2%) and Algeria (+22.6%).  Nigerian shipments were 1.5% higher in the period, while South Africa posted a 14.7% decline.

In Asia, cement shipments increased in all major markets except for Malaysia, which registered a 10.8% decline, though in South Korea the improvement was modest 2.5%.  China boosted deliveries by 16.2%, with increases of 9.8% and 9.7% being seen in India and in the Philippines respectively.  Total Asian deliveries advanced by around 7% to 9.6Mt, with the turnover increasing by 14.8% to €442m and the EBITDA advancing by 26.7% to €109m.  The additional capacity being built in China will mainly come on stream in 2010.