Lafarge’s nine-month attributable profit falls 25.8 per cent

In the first nine months of the year, Lafarge's turnover, including its share of joint ventures, declined by 1.3 per cent to €11,332m while the EBITDA edged ahead by 0.5 per cent to €2320m. The trading profit improved by 2.8 per cent to €1589m, while excluding associates there was a 1.2 per cent reduction to €1431m. 

Net financial charges declined by 6.7 per cent to €701m and the pre-tax profit was three per cent lower at €636m. Following a 33.3 per cent higher tax charge, the net attributable profit declined by 25.8 per cent to €288m. Net debt at the end of September was 6.1 per cent lower at €10,271m, producing a gearing level of 65.9 per cent.

Capital investment was reduced by 8.9 per cent to €617m, with development expenditure declining by 16.9 per cent while maintenance capital expenditure increased by 10.6 per cent to €219m. For the full year, capital expenditure is forecast to amount to around €1100m. Acquisition spending rose from €33m to €160m, while divestments raised 49.1 per cent less at €524m.

Cement deliveries recover
Group cement deliveries recovered by 2.8 per cent to 104.8Mt, or 88Mt excluding joint ventures, while turnover from cement was 2.1 per cent lower at €6904m and the EBITDA came off by 1.9 per cent to €1787m. The average price improved by 2.2 per cent in the nine-month period. Turnover in aggregates and associated products declined by 4.8 per cent to €1597m but the EBITDA increased by 5.1 per cent to €208m. Aggregates deliveries were 0.9 per cent lower at 143.6Mt. Ready-mixed concrete deliveries eased by 0.4 per cent to 23.1m m³, resulting in a turnover, including concrete products, 3.8 per cent lower at €1,836m and an EBITDA fell by 23.7 per cent to €71m.

European volumes lower
European cement deliveries were 3.7 per cent lower at 18.2Mt, with turnover being down by 15.6 per cent to €1513m but the EBITDA did improve by 7.0 per cent to €353m. There was a €28m gain from the sale of emission permits compared with nothing in the previous year, but €69m in the year before. Volumes were down by five per cent in Central and Eastern Europe, while in the west they were off by two per cent. In France, cement deliveries were 6.2 per cent lower while in the United Kingdom volumes rose by 4.7 per cent. Spanish volumes were off by a further 1.1 per cent, but in Greece, domestic deliveries did recover by four per cent, after several years of sharply falling volumes.

Polish volumes recovered by just 1.3 per cent as Lafarge concentrated on margins, while Romanian volumes were ahead by 1.6 per cent. In Russia, Lafarge's cement deliveries rose by 10.7 per cent, helped by the commissioning of a new works in the Moscow region.

In aggregates, volumes rose by 7.2 per cent in the British joint venture and by 6.1 per cent in Poland, but declined by 2.4 per cent in France. Ready-mixed concrete deliveries rose by 11.2 per cent in Great Britain but fell by 6.9 per cent in France.

Uncertainties in Iraq
The Middle Eastern and African turnover improved by 3.2 per cent to €2803m and the EBITDA was ahead by three per cent to €788m. Cement deliveries rose by 7.4 per cent to 31.8Mt while the cement turnover amounted to €2513m giving an EBITDA of €768m. The strongest growth came in Egypt with a rise of 22.3 per cent, with volumes increasing by 6.7 per cent in Algeria and by 4.9 per cent in Nigeria.

In Kenya, cement volumes advanced by a modest 1.3 per cent. Iraq was the worst performer because of the civil unrest in large parts of the country and volumes there fell by 14.6 per cent, while deliveries came off by 5.6 per cent in South Africa and by four per cent in Morocco. South African aggregates shipments did improve by 13.6 per cent but ready-mixed concrete deliveries there were down by 4.8 per cent. In Algeria, downstream operations are being developed.

North American turnvover declines, volumes advance
North American turnover declined by 5.3 per cent to €2195m and the EBITDA emerged 3.2 per cent lower at €399m. The cement turnover was 1.7 per cent lower at €940m but the EBITDA did improve by 4.1 per cent to €227m. Cement deliveries were 3.2 per cent higher at 8.7Mt, with volumes being stable in Canada but growing by 5.5 per cent in the USA and prices there improved, primarily helped by the recovery in housebuilding activity.

The North American aggregates volumes declined by 7.7 per cent to 62.4Mt, with all of the reduction being in Canada and there was a 0.2 per cent improvement in the USA. Turnover in pure aggregates declined by 9.1 per cent to €709m. Ready-mixed concrete deliveries were by some three per cent lower at the underlying level at 4.1m m³, following some US disposals, but the absolute numbers show volume reductions of 6.6 per cent in the USA and of 4.3 per cent in Canada. Turnover was down by 16.3 per cent to €513m and the EBITDA fell by some 58 per cent to €14m.

India boosted by new Rajasthan works
In Asia, turnover was off by one per cent to €1648 while the EBITDA declined by 16.1 per cent to €318m and the trading profit fell by 22.5 per cent to €318m. Cement shipments increased by 7.7 per cent to 23.7Mt on a cement turnover of €1.479m producing an EBITDA of €317m. The new cement works Rajasthan in India led to 34.1 per cent jump in the Indian turnover and the different geographical mix saw the average price fall.

Volumes in The Philippines improved by a further 5.4 per cent and the joint venture in China increased volumes by 2.6 per cent. On the other hand, shipments declined by 2.8 per cent in South Korea, by 1.5 per cent in Malaysia and by 0.7 per cent in Indonesia.

The sale of aggregates improved by around 5 per cent to 6.4Mt, while ready-mixed concrete deliveries were down by some 17 per cent to 3.5Mm³, and volumes in India, its biggest market in Asia, declined by 15.4 per cent. 

Brazil and Ecuador shipments fall
The Latin American turnover was down by 18.9 per cent to €549m, of which cement accounted for €598m, an 8.2 per cent reduction. The EBITDA fell by 34.6 per cent to €215m overall and by 33 per cent to €122m in cement. Cement deliveries were around 18 per cent lower at 5.6Mt, with cement deliveries declining by 1.8 per cent in Brazil and by 0.6 per cent in Ecuador. The third quarter showed a five per cent reduction in Brazilian cement volumes, ahead of the October election, but the EBITDA was relatively stable.

Regional aggregates deliveries increased by some 10 per cent to 2.2Mt and ready-mixed concrete deliveries rose by around 24 per cent to 1.1Mm³.