Cement group Lafarge upbeat on global demand

Paris February 20, 2014:- Lafarge said that demand in the emerging markets would pick up sharply this year and make progress in Europe, as the cement group reported nearly a doubling in fourth-quarter net profit.

Seen as a barometer for global construction activity, the French group said it expected the global cement market to expand between 2 and 5 per cent this year, led by growth in North America, Middle East and Africa.

“I’m very confident in how things are going in emerging markets,” said Bruno Lafont, chief executive, adding that demographics and urbanisation trends supported Lafarge’s businesses.

He said that sub-Saharan Africa was a focus, with expansion of its operations in Nigeria, Tanzania, and Zambia set to take capacity there to more than 30m tonnes by 2017, up from 20m tonnes last year.
 

Mr Lafont said that he expected markets in Europe to stabilise this year, which would mark “enormous” progress from conditions in recent years.

The group suffered from its exposure to international markets in 2013, hit by a strengthening euro and the fall of many emerging market currencies.
 

This left underlying net profit down 9 per cent to €3.1bn for the year, although excluding the effects of exchange rates it rose 2 per cent, according to the company.

Currency factors also reduced sales by 4 per cent overall on the year to €15.2bn. Still, shares in Lafarge rose 2.6 per cent to €53.91 on Wednesday.
 

Net profit for the year rose 65 per cent from €365m to €601m, boosted by asset sales. Fourth-quarter net profit rose from €83m last year to €213m.

Lafarge said it is on course to reduce net debt to €9bn this year from €10.3bn at end of last year, which was down from €11.3bn a year earlier.- FT