St Lawrence Cement Group has come off its most profitable year anticipating strong results in 2007 despite declining housing market.
"We see construction activity remaining near the strong levels of recent years despite the softness in residential housing," CEO Philippe Arto said yesterday after the company reported its most profitable year ever, despite a lower fourth quarter.
Non-residential and infrastructure construction that uses a lot of cement is expected to gain momentum despite declining residential housing stocks, which should remain "robust by historical standards."
The Canadian subsidiary of Swiss-based Holcim Ltd. said its 2006 operating profit was up 21.5 per cent from the prior year’s $155.5m.
Net earnings increased to $83.2m, or $1.98 per share, from $20.6m, or 49 cents per share.
Based on the performance, the quarterly dividend was increased by a penny to 15 cents per share as of May.
The company paid dividends of $23.8 million in each of the last two years.
Full-year sales increased five per cent to $1.38 billion from $1.32 billion, as "selling prices for construction materials were higher in all markets in 2006, offsetting lower sales volumes, while construction services revenues increased."
The company plans to complete several capital projects this year, the largest being construction in the second quarter of a vertical rolling mill in Mississauga, Ont., that will add 500,000 tonnes of grinding capacity. It will also help to reduce St. Lawrence’s greenhouse gas emissions.