Thursday, 5 May 2011 at 11:51, Reuters, Paris
The world's largest cement maker, Lafarge, lowered its forecast for global demand in 2011 on Thursday after inflation and events in Egypt led it to post slightly lower-than-expected first-quarter results.
Lafarge is now forecasting a rise of 2-5 per cent in demand this year led by newly expanding economies in China, India, Indonesia, Turkey and Brazil - where it has 70 per cent of its capacity. Pricing is expected to move higher.
In February, Lafarge predicted a 3-6 per cent rise in demand.
The French group also said it had received €11 million ($15.37m) from asset sales in the first three months of 2011. It pledged in February to sell €750m of non-strategic assets this year to cut debt.
Lafarge plans to cut debt by €2 billion this year in an effort to improve its financial profile after the 2007 purchase of Egyptian company Orascom Cement for €8.8bn.
In a conference call on Thursday, Chief Executive Bruno Lafont told reporters the group was "confident" it would achieve or exceed this amount. Net debt at the end of the first quarter stood at €14.2bn.
Lafont refused to comment on a possible sale of Lafarge's plaster activities, however. Lafarge said in a statement that current operating profit fell five per cent to €224m in the first quarter. Sales rose nine per cent to €3.56bn.
Analysts polled by Reuters were expecting current operating profit of €254m and sales of €3.52bn. Political unrest in Egypt led to a €30m decline in current operating income in the cement division, Lafarge said.
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