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LafargeHolcim Warns On Q2, Withdraws FY20 Outlook Due To Covid-19; Stock Dips

Cement giant LafargeHolcim (HCMLY.PK,HCMLF.PK) Friday announced that its first-quarter demand was solid overall, but it now expects significant negative impact on its business in the second quarter due to coronavirus or Covid-19. The company also said its guidance for 2020 is no longer valid.

LafargeHolcim is now experiencing disruptions in operations in various countries. In China, the recovery of the construction sector has started and all plants outside of Hubei Province are operating. The company projects the market demand to further recover and to supply 70% of last year's volume in April 2020.

In most of the other key markets, the construction sector is disrupted and the company sees significant volume declines in April and May.

In order to mitigate the financial impact of the situation, the company has launched the action plan "HEALTH, COST & CASH" for immediate execution in all countries. These include reduction of CAPEX by at least 400 million Swiss francs compared to 2019, and reduction in fixed cost by 300 million francs in 2020, among others.

LafargeHolcim said it has strong liquidity of 8 billion francs as of March 26.

Further, the Board of Directors confirmed the date of the Annual General Assembly on May 12, but shareholders will not be allowed to attend the event in person.

For the 2019 financial year, the Board of Directors confirms the proposal of a cash dividend of 2 francs per registered share, subject to approval by the shareholders at the Annual General Meeting on May 12.

In Switzerland, LafargeHolcim shares were trading at 34.96 francs, down 3.05 percent.

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