LafargeHolcim to boost prices and curb spending

Cement maker reports €2.6bn loss in Q4 but chief expects firm will make net profit in 2016

 LafargeHolcim:  company intends to keep capital expenditure below 2 billion Swiss francs, down from 2.6 billion in 2015, as it trims operations pooled by France’s Lafarge and Switzerland’s Holcim. Photograph: Arnd Wiegmann/Reuters

LafargeHolcim: company intends to keep capital expenditure below 2 billion Swiss francs, down from 2.6 billion in 2015, as it trims operations pooled by France’s Lafarge and Switzerland’s Holcim. Photograph: Arnd Wiegmann/Reuters

 

LafargeHolcim, the world’s biggest cement maker, intends to boost prices and curb capital spending to shore up 2016 profits as it attempts to wring more savings from last year’s merger.

The Swiss-French group reported a fourth-quarter loss of 2.86 billion Swiss francs (€2.61 billion) after taking 3 billion francs in impairment and other charges to end a year in which it was formed by merger on a downbeat note.

“What we see is a more favourable pricing environment,” chief executive Eric Olsen told reporters on Thursday, adding he expected the group to make a net profit this year.

The company intends to keep capital expenditure below 2 billion Swiss francs, down from 2.6 billion in 2015, as it trims operations pooled by France’s Lafarge and Switzerland’s Holcim.

LafargeHolcim expects “at most” to match the cement market’s 2-4 per cent expansion this year, Mr Olsen added, as markets in China and Brazil remain problematic.

“We would expect real pockets of growth in North America, we see markets in Europe in a better position in 2016 compared to 2015,” he said, adding Mexico, East Africa and the Philippines, as well as India were growing well, partially due to low oil prices.

“China will continue to be more difficult. Brazil will continue to be difficult,” he added.

It maintained the 1.50 franc per share dividend announced in November and said it was on track to hit its 2018 financial targets.

In Germany, rival HeidelbergCement hiked its dividend by 73 per cent after increasing 2015 net profit by two thirds. It forecast investment of €1.1 billion this year and said strength in Britain and the United States was outweighing weakness in Asia.

– (Reuters)