Lafarge defers 18Mt of planned new capacity

Lafarge defers 18Mt of planned new capacity
Published: 07 November 2008

Helped by the acquisition of Orascom, Lafarge generated a turnover 8.3% higher at EUR14,386m in the first nine months of the year and the EBITDA improved by 14.2% to EUR3,579m, with a similar percentage improvement at the trading level.  The net attributable profit before exceptional items rose by 11.6% to EUR1,273m.  Net debt at the end of September was 95.6% higher at EUR17,103m, to give a gearing level of 110.8% compared with 77.6% a year earlier.  Capital expenditure was 46.1% higher at EUR1,715m, and the interest charge up by 57.7% to EUR626m.  Capital expenditure plans for next year and beyond have been cut in response to reduced or uncertain levels of demand and the planned additional capacity has been reduced from 60Mt to 42Mt.  Further divestments, on top of Italy, are expected in the months to come and details of the proposed cost cutting programme should be announced in early December.

Group cement deliveries increased by 16.7% to 101.8Mt and the cement turnover rose by 15.3% to EUR8,926m and the EBITDA advanced by 22.8% to EUR2,2819m.

The European cement turnover improved by 5.3% to EUR3,128m and the EBITDA rose by 13.7% to EUR1,253 as turnover in Central and Eastern European moved ahead by 28.9% to EUR1,105m and the EBITDA advanced by 31.8% to EUR502m.  Overall cement shipments were a marginal 0.1% lower at 35.8Mt as Spanish, British and Greek volumes all dropped.  In France, cement volumes improved by 0.4% while prices rose by 4.7%.  Spain showed the largest volume drop at 16.4%, but prices improved by 2.4%, while in the United Kingdom a 10.4% volume drop was partially mitigated by a 8.2% improvement in prices and product mix.  In addition to the closure of the Northfleet works, one kiln at the Westbury works has also been shut town.  In Greece, domestic deliveries fell by 7.4%, in part offset by price improvements.  Lafarge’s German volumes rose by 6.8% and prices added around 5%, while in neighbouring Poland, the previous year’s 29.7% volume increase slowed down to 1.7%, but better prices and product boosted sales by a further 14.7%.  The strongest European volume increase was again seen in Romania, where shipments grow by 15.6%.  The 58.9% increase in Russian turnover was again mainly price-related, but volumes did rise by 12.0%.  However, Russian demand is now softening, as financing has become more difficult and full year growth may be limited to around 6%.  Serbian volumes improved by 2.9%, while pricing and other factors helped to provide a 13.7% rise in turnover.

The total North American turnover fell by 12.5% to EUR3,179m, with the US revenue dropping by 23.3% to EUR1,629m while Canada registered a 2.7% improvement to EUR1,550m.  Cement deliveries were down by 8.8% to 13.4Mt and two kilns have been shut town, while average prices improved by 4.7%. 

Latin American turnover improved by 13.4% to
EUR727m, of which cement accounted for EUR578m, an increase of 15.8%.  Cement deliveries were 7.9% higher at 6.8Mt and the EBITDA moved ahead by 20.0% to EUR150m.  Brazilian prices have posted a substantial recovery of around one-third on volumes that increased by 11.7%.  In Chile, volumes increased by 13.1% on somewhat softer prices, and volumes are expected to weaken in the final quarter.  Venezuela that now been nationalised, but good volume growth is being registered in both Honduras and Ecuador.  

Turnover in the Middle East jumped from EUR397m to €1,055m thanks to Orascom and the cement turnover jumped by 178% to €881m and the EBITDA shot up 229% to EUR362m.

In Africa, which now also covers Algeria and Morocco, turnover rose by 25.8% to EUR1,809m, of which cement represents EUR1,779m.  Underlying cement volumes were some 2% higher at 17.2Mt and produced an EBITDA of EUR498m, which represents a comparable increase of some 10%.