Lafarge said net profit jumped a greater-than-expected 53 per cent to EUR548m in the first half from EUR359m a year earlier, lifted by ’strong organic growth’, especially at its cement activities.
’We are in line with our targets. These results allow us to confirm our confidence for 2006,’ Bruno Lafont, Lafarge CEO, said in a statement.
Sales grew 21 per cent to EUR8.759bn in the six month to June from EUR7.220bn in the year-earlier period, including 15 per cent organic growth, while operating profit before exceptionals surged 41 per cent to EUR1.177bn from EUR837m, the company said.
Earnings growth should continue in the second half, though at a more moderate pace compared to the strong level of activity a year ago, it said.
’We expect our markets to remain favorable. Price increases should exceed cost increases overall over the year. Continuing rises in energy and transportation costs should be mitigated by the impact of our cost-reduction programs,’ Lafarge said.
The increase in activity and the full effect of the acquisition of minority interests in Lafarge North America should have a ’positive impact’ on EPS in the second half, Lafarge said.
It noted, however: ’the tax rate in the second half should be significantly higher than the particularly favorable level in the second half of 2005.’
First half turnover soared 22 per cent to EUR4.641m in the cement operations and 27 per cent to EUR2.973bn in the aggregates and concrete business, while gypsum sales grew 14 per cent to EUR830m and roofing sales increased seven per cent to EUR726m.
Current operating profit climbed 34 per cent to EUR871m in cement, while rocketing 74 per cent to EUR188m in aggregates and concrete, improving 39 per cent to EUR110m in the gypsum business and 54 per cent to EUR37m in roofing, Lafarge said.