Orascom boosts Lafarge’s growth

Orascom boosts Lafarge’s growth
Published: 20 February 2009

Lafarge’s 2008 turnover rose by 8.1% to €19,033m and the EBITDA by 10.4% to €4,618m.  The trading profit advanced by 9.3% to €3,542m, but after a 78.9% increase in financial charges to €941m and higher exceptional charges, the pre-tax profit declined by 12.5% to €2,418m.  After a 38.1% increase in minorities to €341m, the net attributable profit was down by 16.3% to €1,598m.  Net debt at the end of December rose by 94.4% to €16,884m, largely reflecting the acquisition of Orascom.  Capital expenditure rose by 41.6% to €2,785m, in addition to which €9,282m were spent on acquisitions, 89.7% of which was on Orascom.  

Cement deliveries rose by 13.4% to 154.7Mt and the turnover in cement rose by 14.0% to €11,720m.  The EBITDA rose by 19.8% to €3,664m and the increase at the trading level amounted to 19.5% to €2.964m.  The EBITDA per tonne of cement sold rose by 5.8% to €23.70.  Turnover in aggregates and concrete declined by 0.3% to €6,580m and the EBITDA fell by 9.8% to €883m.  Aggregates deliveries were 4.4% lower at 247.8Mt and turnover was down by 4.8% to €2,407m.  Ready-mixed concrete volumes rose by 3.6% to 43.6Mm³, but at the underlying level there was a drop of around 10%, with the actual turnover advancing by 2.5% to €3,538m.  The group’s gypsum operations increased plasterboard deliveries by 4.2% to 745Mm², but the strong cyclicality in North America market led to a 39% drop in EBITDA to €116m on a turnover that was 2.2% lower at €1546m. 

Lafarge’s European cement turnover improved by 1.1% to €4,168m and the EBITDA rose by 6.2% to €1,462m as turnover in Central and Eastern European advanced by 20.8% to €1374m and the EBITDA by 22.8% to €619m.  Overall cement shipments declined by 3.2% to 48.2m tonnes, but deliveries in Central and Eastern Europe rose by 4.5% to 16.2m tonnes.  French cement volumes declined by 4.0% but a 4.9% price improvement led to a 1.0% increase in turnover.  Britain cement shipments dropped by 14.8% and the overall turnover fell by 6.4%.  Spanish cement deliveries fell by 19.9%, but prices still improved by 2.5% though with an unfavourable mix, the turnover fell by 20.7%.  In Greece, cement deliveries fell by 8.2% and the domestic was down by 1.2%. 

In Germany, volumes improved by 2.8% and prices advanced more significantly, giving a 10.7% rise in turnover, while in neighbouring Poland, volumes were virtually unchanged while prices were some 13.5% higher.  In spite of some weakness in the final quarter, Romanian volumes grew by 13.7% in the year and pricing was strong.  In Serbia and Russia volumes rose by 6.1%, though Russian volumes were hit in the last quarter, with pricing being well ahead in both countries, particularly in Russia.  The trading profit from western European concrete and aggregates activities dropped by 22.6% to €212m, with aggregates shipments declining by 7.3% to 79.2m tonnes and turnover by 7.1% to €1,014m, ready-mixed concrete deliveries fell by 7.2% to 18.1m m³ and the turnover by 3.8% to €1,586.