French building materials company Compagnie de Saint-Gobain SA (CODGF.PK) on Wednesday reported a 40 percent decline in net profit for fiscal year 2012, hurt by lower margins that offset a slight growth in revenues.
Results were impacted by a sharply negative cost/price spread in Flat Glass as well as a drop in sales volumes, amid the slowdown acros Europe as well as slacker growth in its main markets, the company said.
Moving forward, Saint-Gobain said outlook for 2013 appears very uncertain for the time being. However, the year should see an ongoing economic recovery in North and South America and Asia, although significant uncertainties will continue to plague Europe, it added.
Saint-Gobain reported net income of 766 million euros or 1.46 euros per share for fiscal year 2012. This compares with net income of 1.23 billion euros or 2.44 euros per share a year earlier.
Excluding capital gains/losses and other items, recurring net income for the year was lower at 1.13 billion euros or 2.14 euros per share, down from 1.74 billion euros or 3.30 euros per share in the prior year.
Operating income for the year fell 16.3 percent to 2.9 billion euros from 3.4 billion euros a year ago.
Meanwhile, sales for fiscal year 2012 rose 2.6% to 43.2 billion euros from 42.12 billion euros in the prior year. Currency impact was a positive 1.8 percent on sales during the year.
On a like for like basis, sales for the year edged down 1.9 percent, with a 1.7 percent increase in sales prices failing to offset 3.6 percent drop in volumes.
CEO Pierre-André de Chalendar said, "2012 saw a further general slowdown in economies across Europe as well as slacker growth on our main markets (particularly Flat Glass) in Asia and emerging countries..."
Among segments, Innovative Materials sales slid 1.2 percent, hurt by tough trading in Flat Glass and the slowdown in High Performance Materials. Construction Products sales edged up 2.5 percent, and Building Distribution was up 4 percent.
By region, sales in North America rose 12.2 percent, while France was up 2.1 percent. Western European countries gained a modest 0.2 percent.
Meanwhile, for the fourth quarter of 2012, Saint-Gobain reported a 1.6 percent rise in total sales to 10.66 billion euros from 10.49 billion euros in the prior year.
For fiscal year 2013, the company expects its operating income to recover in the second half, after having bottomed out between mid-2012 and mid-2013. It also expects cost savings of 1.1 billion euros in the year.
Saint-Gobain also said that the Group's 2015 financial targets set in 2010 are unlikely to be met at this date.
"The global economic environment looks set to remain uncertain for the time being, despite the improvements expected in the US and Asia. In 2013, we anticipate operating income to recover in the second half of the year, after having bottomed out in the second half of 2012 or first half of 2013," added Chalendar.
Additionally, Saint-Gobain's Board has decided to recommend to the June 6 Shareholders' Meeting a dividend of 1.24 euros per share. The record date is set for June 11 and will be followed by an option period of 15 days. The dividends will be paid in cash or in shares on July 5.
In Paris, the company's stock closed Wednesday at 31.41 euros, down 0.54%, on a volume of 1.8 million shares.
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