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Earnings Analysis: 
Lafarge Profit Up 49% on Sales
Author: 123jump.com Staff
123jump.com
Last Update: 2:13 PM EDT May 07 2008

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The world’s largest cement maker Lafarge SA’s sales increased 8% to €4 billion from €3.6 billion last year thanks to cement sales which increased 16% to €2.5 billion leveraged by strong growth in emerging markets such as Central and Eastern Europe and Asia. Throughput from Egypt’s Orascom Construction, which was acquired in December for €8.8 million, also helped to boost revenues.

 
Investments and Divestments

During the quarter, sustaining capital expenditure was stable at €165 million and development capital expenditure to increase production capacity totaled €244 million.

Investments were mainly channeled into the construction of new cement capacity in Morocco, China, Zambia, Indonesia, India, Ecuador, the US, South Africa, Chile, Cameroon, Russia and Poland, as well as in those countries where Orascom Cement is present.

Orascom Cement was consolidated into Lafarge at the beginning of the year and the total acquisition price amounted to €8.3 billion financed through the issuance of 22.5 million shares for €2.5 billion and a syndicated credit facility.

In the review period, disposals amounted to €21 million, compared to €2.34 billion in 2007.

Sale of stake in Lafarge Titan in Egypt

Lafarge recently sold its 50% stake in Lafarge Titan in Egypt to its joint venture partner Titan, for €330 million.
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