Lafarge North America Inc reported a first-quarter net loss of $188.5m. Excluding a previously announced one- time tax charge of $115.7m associated with the company’s decision to repatriate $1.1bn of cash from the company’s Canadian subsidiary, the net loss during the quarter was $72.8m. The results compare with a first quarter 2004 net loss of $70.8m.
Every year, Lafarge North America normally reports a loss in the first quarter because its business activity slows during the winter months. On average, only about 15 per cent of the company’s annual sales are realized during the first three months of the year. In addition, the company performs most of its major plant maintenance during this time.
"We expect the strong market conditions we experienced last year to continue in 2005, and we increased spending this quarter to prepare our aggregates and cement facilities in anticipation of higher sales," said Philippe Rollier, president and chief executive officer of Lafarge North America. "We believe these actions will allow us to better serve our customers and take advantage of the favorable market environment in the coming months."
Consolidated net sales were $577m, up 13 percent over the same period in 2004. Excluding a favorable Canadian exchange rate effect, net sales were 10 per cent higher than last year. US net sales increased 18 per cent compared with last year, while Canadian sales increased 7 per cent in local currency. The strengthening of the Canadian dollar negatively affected operating income during the quarter by $4.7m.
The cement segment reported an operating loss of $19 million during the quarter, compared with a loss of $18.2m in the first quarter 2004. Net sales from continuing operations were $209m , an increase of 18 percent compared with last year. Excluding the favorable impact of the exchange rate, revenues were up 15 percent from the same period in 2004.
The company mobilised additional clinker production capacity during the quarter, expanded its storage and distribution capability, and shortened maintenance turnaround times in preparation for an expected strong shipping season later in the year. While increased volumes and higher prices contributed positively to income, results for the quarter were lower compared with the same period last year, primarily due to the increased costs associated with the preparatory activities and higher energy and transportation expenses.
