LafargeHolcim reports 2.86 billion francs in losses, EPS of 1.50 francs

Thursday, 17. March 2016 08:49

LafargeHolcim reported fourth quarter 2015 loss of 2.86 billion Swiss francs (€2.60 billion), citing "challenging environment in selected markets" and impairment and other expenses that amounted to 3 billion francs (€2.73 billion).

The Swiss-French corporation reported the adjusted operating earnings before interest, tax, depreciation and amortisation (EBITDA) at 1.40 billion francs (€1.27 billion) on the fourth quarter sales of 7.44 billion francs (€6.78 billion).

The Zurich, Switzerland-based cement producer kept its earlier proposal that earnings per share should stay at 1.50 franc (€1.36)

Its net debt stood at 17.3 billion francs (€15.75 billion), reduced by 1 billion francs (€911 million), and the plans are to further cut the debt burden to 13 billion francs (€11.84 billion) by the end of the year.

"Overall, we see demand in our markets growing 2-4 percent during 2016. Emerging markets will continue to grow overall, supported by their strong long-term fundamentals and despite the challenging evolution in some of these markets," said Eric Olsen, chief executive of LafargeHolcim, in written statement giving an outlook for the year.

LafargeHolcim also reported it has a divestment programme underway in Saudi Arabia and South Korea valued at 3.5 billion francs (€3.18 billion), while in Morocco the company's joint partner SNI is included in merger of Lafarge and Holcim companies in the African country.

LafargeHolcim is still battling the effects of the merger between the French Lafarge and the Swiss Holcim cement producers, one-time bitter rivals, to create the world's biggest cement company.

Almost one year on, LafargeHolcim chairman Wolfgang Reitzle is on departure, leaving the chief executive Eric Olsen to find a way to navigate merger, difference in corporate cultures, global operations, falling prices and lower demand, all leftovers of recession keeping low demand for building materials.

Its stock price falling 43.56% since the trading began in July 2015, and its earnings are nowhere to be seen. That compares to performances of rivals such as the French company Saint Gobain, which lost only 8.16%, and the German rival Heidelbergcement AG which stood flat for the year despite serious market turbulence.

This is the reason for the corporation counts in just 450 million francs of "incremental EBITDA synergies expected for this year," less than a half of 1 billion in cost cuts promised by merger synergies.

Image: © Getty/Diana Meister (25742556)

Related Links: Saint-Gobain S.A.LafargeHolcim Ltd.HeidelbergCement AG
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Breaking the News / ZR