Lafarge record first quarter sales

Lafarge record first quarter sales
Published: 02 May 2006

Sales were up 28.1 per cent to €3772m as at March 31, 2006.  This compares to a weak first quarter in 2005.  Volume trends were favorable, reflecting overall good weather conditions and growth in those businesses and markets where the Group is present. Significant price increases were successfully implemented in an environment of high energy and transportation costs.  The net scope effect was +2.2 per cent.  Foreign exchange variations positively impacted sales by 6.7 per cent. Bruno Lafont, Chief Executive Officer of the Group, said: “This strong level of sales confirms the favorable trends for 2006 presented earlier this year. Our management team is focused on implementing our strategic plan, aimed at increasing the profitability of our future growth, streamlining our organization and reducing costs, in order to achieve the best performance levels in our industry, for the benefits of our shareholders."

Cement sales were up by28.4 per cent. This very strong growth in cement was achieved through solid volumes favored by robust construction activity in most markets -amplified in Europe and North America by more favourable weather conditions than in 2005- and through significant price increases successfully implemented.  

In Western Europe, sales were up overall with good growth in France, Spain and Greece. Volume increases were more limited in Germany and in the UK. Good pricing trends were seen across the region. Strong demand and favorable weather in North America led to a very significant increase in sales. Average prices increased significantly in both the United States and Canada.

Central and Eastern Europe recorded high levels of activity in most countries, with the exception of Poland, impacted by bad winter conditions. Strong sales growth was recorded in the Mediterranean Basin, with a solid construction sector and good pricing trends in Jordan, Turkey, Egypt and Morocco. In Africa, sales increased strongly, benefiting from favorable volume trends across the region, particularly in Nigeria. Prices were up in all markets.

In Asia, sales were up throughout the region. In Malaysia, prices increased strongly from the low level seen in the first quarter of 2005, while volumes declined slightly. India and South Korea continued to enjoy strong growth in volumes. Prices are stabilizing in South Korea. In the Philippines, demand was impacted by a slow construction sector. In China, volumes were substantially up, benefiting from our new plant in Chongqing.

In Latin America, sales were up overall, but with contrasting performance across the region. Very strong volume growth was recorded in Venezuela and Brazil, boosted by a high level of activity in the construction sector, while Chile remained sound. Prices in Brazil fell sharply year on year, leading to a significant decline in sales, and no price improvement is anticipated in the short term.