LafargeHolcim Q2 net income rose to $410.8 million
Staff Writer |
LafargeHolcim reported a gain in second-quarter net profit compared with the same period last year, despite a sales decline, as the company cut costs and shed unwanted assets.
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LafargeHolcim said that net income rose to 400 million Swiss francs ($410.8 million) in the quarter, from 263 million francs in the same period last year. Net sales fell 6.7% to 7.28 billion francs. Analysts had expected 7.7 billion francs in sales.
The company's closely watched operating profit before interest, taxes, depreciation and amortization rose 10.5% in the quarter from the same period last year, to 1.58 billion francs.
Net debt stood at 18.1 billion francs, the company said. For the full year, LafargeHolcim said it expects demand to grow between 1% and 3%, and that it should be able to cut its net debt to roughly 13 billion francs.
The company's latest results were bolstered by higher cement prices and falling energy costs, LafargeHolcim Chief Executive Eric Olsen said, on a call with reporters.
However, cement sales fell 7.8% globally, the company said, adding, "In some markets this is due to a blend of geopolitical or macroeconomic reasons."
In Nigeria, the company said its plants were affected by local gas shortages, which cut into profitability in the period. Mr. Olsen said the issue should be "substantially behind us" later this year.
Last year, Switzerland-based Holcim merged with France's Lafarge to create the world's largest building materials company in terms of sales. The company is now in the midst of an effort to shed assets in order to raise funds and cut losses in more challenging markets.
LafargeHolcim said last month it would sell its interest in Lafarge India to a local conglomerate for an enterprise value of $1.4 billion, and disclosed earlier this week that it agreed to sell most of the non-listed Chinese cement assets of Lafarge China Cement Ltd. for an equity value of 208 million francs.
The company said Friday that as a result of divestments announced since the beginning of the year, it has received proceeds net of tax that should result in a 3.5-billion-franc reduction in net debt.
In addition, the company said it now plans an additional 1.5 billion francs in divestments by the end of next year. ■