Lafarge profits fall on flat sales
By Chris Sleight02 August 2011
Lafarge's operating profit for the second quarter of the year was -16% down on the same period last year at € 702 million (US$ 1.01 billion). The company's sales for the quarter were almost unchanged at € 4.42 billion (US$ 6.36 billion), compared to € 4.44 billion (US$ 6.39 billion) a year ago.
The company said that lower profits were due to higher cost inflation and unfavourable exchange rates compared to a year ago. Commenting on these factors, Lafarge chairman and CEO Bruno Lafont said, "The group is focussed on its priorities, including price actions in response to a high cost environment and strategic moves with its asset portfolio, to support profitability and reduce debt by at least € 2 billion (US$ 2.9 billion) this year. The business will continue to benefit from volume growth thanks to our continued development in emerging markets."
The company added that cement sales had seen a +3% rise on the in revenues terms and +9% in volume terms in the quarter, reflecting higher sales in emerging markets and new production capacity in Brazil. However, prices were down on 2010 levels and profits from cement sales were lower as a result.
Aggregates sales were down -2% over the quarter, but up +3% in the first half of the year. Gypsum sales were up +2% in the quarter and +5% in the first half.