Lafarge boosts first quarter margins

Lafarge boosts first quarter margins
Published: 03 May 2007

The underlying EBITDA rose by 28.6% to €575m and the running profit before tax improved by 26.0% to €451m.  Capital gains of €148m, compared with a €3m loss in the comparative period last year, led to an almost trebling of the pre-tax profit (up 2.94 times) to €317m, while the net profit jumped from €70m to €397m.  Net debt at the end of March was 9.4% lower than a year earlier at €7,650m, to give a gearing level of 65.7%. Group cement shipments in the period amounted to 29.3Mt, an increase of 9.7%, while aggregates deliveries were 3.0% ahead at 48.2Mt and ready-mixed concrete volume rose by an underlying 5.1% to 9.8m m³.
Turnover from cement increased by 9.7% to €2,007m, which represented 54.3% of the group total.  In terms of trading profit, 86.3%, or €298m (+49.8%), came from cement in the period.  Lafarge’s global gypsum interests generated a turnover 1.2% higher at €415m though the trading profit was off by 4.2%. Improved profitability was seen across most of Europe, but the drop in the US housebuilding market led to lower volumes and lower plasterboard prices.
Thanks to the Central and Eastern European cement operations just over doubling their contribution, The European cement turnover rose by 18.6% to €1,751m, with the EBITDA rising by 60.7% to €347m. Cement shipments rose by some 23% to 8.7Mt.  In France, cement volumes rose by 2.9% and turnover increased by 7.0%, with come plants being close to the capacity limit.

British volumes advanced by 7.3% and continued good pricing led to a 14.1% increase in turnover.  In Spain, shipments were off by 2.2% but the turnover advanced by 5.7%. Market conditions in Greece were particularly favourable and volumes there increased by 20.1% and the turnover shot by 37.5%.  German volumes were helped by a mild winter and a good construction market, leaving turnover ahead by 55.6% and average prices improving by 9.5% to around  €52 per tonne. 
Strong demand and kind weather led to volume increases of 160.7% in Romania and of 146.0% in Poland.  In Russia, volume growth of 31.6% and very strong pricing let to an 87.8% increase in turnover.  In Serbia, on the other hand, virtually all of the 95.9% turnover growth was volume driven.
Western European concrete and aggregates trading profit rose by around 36% to €53m as aggregates shipments were some 2.5% higher at 20.4m tonnes and turnover rose 7.3% to €236m and ready-mixed concrete sales were 14.5% higher at €410m, with volumes ahead by almost 9% to 4.9m m³.