BY: John Revill
ZURICH: LafargeHolcim reported a 13 percent fall in first-quarter earnings as the world’s largest cement maker embarks on its new strategy under new Chief Executive Jan Jenisch.
The Swiss company said recurring earnings before interest, tax, depreciation and amortisation fell to 700 million Swiss francs ($697.70 million) from 808 million francs a year earlier.
When adjusted for currency effects and the asset sales, the decline was 7.7 percent.
Revenue was flat at 5.83 billion francs, said LafargeHolcim, which changed its reporting practices and no longer publishes net profit for its first quarter.
When divestments of cement plants were taken into account, sales rose 3.1 percent, the company said, adding its results were hit by the “especially harsh winter” in North America and Europe where sales fell.
Still, LafargeHolcim confirmed its targets for 2018, which included sales growth of 3 to 5 percent and an increase in recurring EBITDA of at least 5 percent.
“I am very confident when I look at the market, construction projects and orders we have in the pipeline,” Jenisch told reporters. “I am very confident that Europe and North America will be key contributors to this growth.”
LafargeHolcim, forged through a merger of Switzerland’s Holcim and France’s Lafarge 2015, has struggled with a chequered start to life as a combined company.
It parted with Chief Executive Eric Olsen last year after it acknowledged paying armed groups to keep a factory running in war-torn Syria. Olsen denies any wrongdoing in the matter, which is being investigated by the authorities in France.
The company’s results have also been disappointing so far, triggering a revamp of its strategy under Jenisch, focusing more on growth and concentrating on fewer markets.
Jenisch gave no details of potential divestments on Tuesday. “We have positions in 54 different countries…we said for the strategy this is maybe too many markets to focus on so we will divest a few markets,” Jenisch said.
“Here I have no news today, we are analysing. It will not be a revolution, but we have to focus on less markets in order to make the necessary investments.”
Pre-market indicators showed Holcim shares trading down 0.6 percent.
($1 = 1.0033 Swiss francs)
Source: Reuters (Editing by Michael Shields)