Lafarge speeds up savings drive, sees 2013 growth
February 20, 2013 9:35 PM EST
The world's largest cement maker said it would speed up its cost-cutting drive and confirmed its aim to reduce debt to below 10 billion euros ($13.4 billion) "as soon as possible" in 2013.
The French group has sold non-core assets including its European and South American gypsum units, refocused on the cement and concrete business, and cut costs after losing its investment-grade debt rating in 2011.
By the end of 2012, Lafarge's debt had decreased 5 percent from a year earlier to 11.32 billion euros.
The group managed close to 900 million euros worth of divestments last year and will shortly exceed its target of 1 billion euros of disposals, it said in a statement on Wednesday.
Further assets are expected to go on the block in 2013, Chief Executive Bruno Lafont told reporters without giving a specific target.
"Our debt will decrease thanks to cash flow, a tight control on investments, our actions on working capital needs and the continuation of our targeted disposals," he said.
To speed up its debt-cutting drive, Lafarge lifted its cost-savings goal for 2013 by 100 million euros and said it would achieve its overall savings plan a year early in 2014.
Lafarge also surprised investors by doubling its 2012 dividend to 1 euro a share.
At 1019 GMT, Lafarge shares, which have risen around 36 percent in the past year, topped the best-performing shares on Paris' benchmark CAC 40 index <.FCHI>, trading 6.2 percent higher at 49.63 euros.
In its outlook for 2013, Lafarge predicted that cement demand would move higher, driven by emerging countries as well as the recovery of housing in the United States, and said it would charge higher prices to customers.
It also predicted that volumes in its cement markets would grow between 1 and 4 percent this year compared with 2012, despite the economic slowdown in Europe.
Quarterly net profit was 100 million euros, compared with a loss of 3 million in the same period a year earlier, while sales declined 1 percent to 3.8 billion.
Full-year sales rose 3 percent to 15.81 billion.
($1 = 0.7487 euros)
(Reporting by Elena Berton; Additional reporting by Matthieu Protard; Editing by Christian Plumb and Helen Massy-Beresford)
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