Lafarge slips to first quarter loss
By Helen Wright05 May 2011
Lafarge reported a net loss for the first quarter of € 29 million, compared to profits of € 64 million during the first three months of 2010, despite seeing a +9% year-on-year increase in sales during the period to € 3,3 billion.
The company said its first quarter 2010 net income had been boosted by a one-time gain of € 137 million related to the sale of its investment in Portuguese cement group Cimpor.
But Lafarge said this year's result had also been dampened by inflationary pressure and the unrest in Egypt, where political events in the quarter weighed on regional sales volumes.
And weak conditions persisted in the company's North American business. First quarter operating losses at the unit deepened to € 148 million from € 146 million in the year-ago period. Overall, group operating income slipped -5% to € 224 million.
Nevertheless, the company reported higher volumes across all product lines. In the cement business, sales grew +7% year-on-year to € 2,1 billion, reflecting volume improvements across most regions, new capacities in Brazil and favourable exchange rates.
The aggregates and concrete division reported +12 % increase in sales to € 1 billion due to volume growth and higher pricing, while Gypsum sales improved +9% to € 371 million due to continued volume growth and higher pricing.
Lafarge said it expected to see demand for cement move higher during 2011, estimating year-on-year market growth of up to +5%. It said emerging markets would continue to be the main driver of demand, while it expects the recovery to continue in developed market. Pricing is also expected to move higher for the year in line with cost inflation.