Lafarge said Thursday its net profit rose 19 per cent last year and said it expects operating profit growth to slow due to high energy costs in 2005.
Lafarge, the world’s largest cement maker, said net profit was Euro868m last year, up from Euro728m in 2003, but below the Euro932m that analysts had penciled in. Lafarge forecast like-for-like operating profit growth of between 6% and 8% this year, down from the 12.8% achieved in 2004.
Lafarge cited high energy and energy-related cost increases as well as expected weakness of the German, South Korean and Brazilian markets this year as being among the brakes on growth this year. In a statement, Lafarge Chief Executive Bernard Kasriel said: "We enter 2005 well placed to leverage the overall favorable market environment and to increase prices."
"Our financial flexibility will enable us to pursue our growth strategy," he added, in a nod to expectations that the group will continue to make small to medium-sized acquisitions.
Lafarge’s core cement division, which makes up about half the group’s revenue but three-quarters of its operating profit, posted operating profit growth of 6.7%, leaving the division’s operating margin flat at 23%. Last year Lafarge sold 120Mt of cement last year, up from 108Mt in 2003.