Lafarge North America Reports 2Q

Lafarge North America Reports 2Q
04 August 2004

Lafarge North America Inc, the leading supplier of construction materials in
the US and Canada, today reported second-quarter 2004 net income of $102
million, or $1.34 per share diluted. The results compare to net income of
$73.9 million, or $1.00 per share diluted, in the second quarter 2003.

"Our businesses got off to a very good start during the first half,
capitalizing on improved economic and weather conditions to generate
significant increases in operating income compared with last year," said
Philippe Rollier, president and chief executive officer of Lafarge North
America. "Looking forward to the balance of 2004, comparisons will be more
challenging due to the strong demand and good fourth-quarter weather we
experienced during the second half of 2003. However, with more favorable
cement and gypsum pricing environments and our solid performance during the
first half of this year, we expect to achieve strong growth in full-year
earnings from continuing operations."

Consolidated net sales were up 15 percent over last year to $989.9 million.
Excluding the favorable Canadian exchange rate effect, net sales were 12
percent higher than last year. U.S. net sales increased 11 percent compared
with last year, while Canadian sales increased 15 percent in local currency.

The cement segment reported an operating profit of $112.4 million during the
quarter, 8 percent higher compared with the second quarter 2003. The
improvement reflects increased sales volumes and lower fixed costs. Growth
in profitability was dampened by increased energy costs and higher volumes
of cement imported to meet increased customer demand in some regions of the
U.S. The strengthening of the Canadian dollar contributed $3.9 million to
operating income in the quarter. Pension and post-retirement expenses in the
quarter increased by $2.3 million over the same period last year, partially
offsetting this gain.

Average cement prices, excluding the exchange rate, were up 1 percent
(approximately $1 per ton) from levels in the same quarter last year. U.S.
cement prices have now recovered from the declines experienced during the
second half of 2003. Average prices during the current quarter in the U.S.
were up more than 2 percent compared with the fourth quarter 2003, and 3
percent above levels in the first quarter 2004. This recovery is primarily
driven by the successful implementation of price increases in a majority of
the company’s markets, ranging from $2 to $4 per ton. A second round of
price increases, between $3 and $5 per ton, was implemented on August 1 in
most U.S. markets.

Published under Cement News