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Lafarge Q1 Loss Widens On Charges; EBITDA Improves - Update


France-based cement giant Lafarge SA (LFRGY.PK,LFGEF.PK) Friday said its loss in the first quarter widened, owing to restructuring charges related to the cost reduction program. Earnings before interest, tax, depreciation and amortization increased amid a modest growth in revenue.

Bruno Lafont, Chairman And Chief Executive Officer of Lafarge, said, "While the first quarter results traditionally represent a small quarter and we remain cautious for the year, the Group was encouraged by the higher revenues and EBITDA growth."

Net loss group share widened to 44 million euros ($57.87 million) or 0.15 euros per share from 29 million euros or 0.10 euros per share a year ago. Last year's figures have been adjusted.

The company incurred restructuring charges of 94 million euros in the just concluded quarter, as part of implementing the cost reduction program. Excluding restructuring charges, net income group share improved to 18 million euros or 0.06 euros per share.

EBITDA grew 8 percent to 516 million euros, aided by improvement in North America and double digit EBITDA increases in Middle East and Africa, Latin America, and Asia.

Declines occurred in Western and Eastern Europe due to poor weather conditions and a challenging economic environment in Spain and Greece. EBITDA margin improved 50 basis points to 15.4 percent from 14.9 percent.

Quarterly sales grew 5 percent to 3.35 billion euros from 3.21 billion euros. The sales increase stemmed from improved pricing across all product lines and higher cement volumes in emerging markets.

Sales declined nearly 11 percent in Western Europe to 753 million euros, while in North America, sales grew 12 percent to 490 million euros.

Middle East and Africa sales improved 7 percent to 1.044 billion euros and revenue from Asia increased 14 percent to 644 million euros. Latin America sales climbed 15 percent to 241 million euros.

Cement volumes edged up 1 percent, while volumes dropped 4 percent in Aggregates and 7 percent in RMX concrete.

The company achieved 70 million euros of cost savings and is on track to reach at least 400 million for the year. Net debt at the end of the quarter declined 13 percent from last year.

Looking ahead, the company continues to see cement demand moving higher. Lafarge maintained its estimated year-over-year market growth of between 1 to 4 percent in 2012.

"Emerging markets continue to be the main driver of demand and Lafarge benefits from its well balanced geographic spread of high quality assets. Lafarge expects higher pricing for the year and that cost inflation will increase at a lower rate than in 2011," the company noted.

The stock closed in Paris on Thursday up 0.33 percent at 29.98 euros on a volume of 1.66 million shares.

by RTTNews Staff Writer

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