Lafarge says to hit debt-reduction target in second-half
PARIS (Reuters) - Lafarge (LAFP.PA), the world's largest cement maker, said it expected to cut net debt below 10 billion euros ($13 billion) towards the second half of the year as it sheds assets and caps spending.
The company also said it expected demand for cement to increase over the full year, with the market likely to grow between 1 percent and 4 percent, driven by emerging markets, while pricing would also rise.
"We expect to see cement demand growth in our markets," Chief Executive Bruno Lafont said. "Price increases have been actively implemented in most markets and we will reap the full benefit as the year unfolds."
Shares in the company were 4.3 percent higher at 51 euros at 0806 GMT, outperforming a 0.2 percent gain in the French blue-chip CAC 40 index .FCHI.
Lafarge had 11.81 billion euros of net debt at the end of the first quarter. The debt pile, resulting mainly from its 2008 purchase of Egypt's Orascom, has led to "junk" ratings from agencies Standard & Poor's and Moody's.
The group has secured 1 billion euros worth of asset sales since the start of last year, of which it has so far received 600 million in proceeds, and it has also set an initial limit on capital expenditure of 800 million for the year.
Lafarge said sales in the first quarter slipped 6 percent to 3.14 billion euros, broadly in line with the average of analyst estimates of 3.15 billion in a Thomson Reuters I/B/E/S poll.
Earnings before interest, tax, depreciation and amortization (EBITDA) fell 26 percent to 380 million euros, below the average Thomson Reuters I/B/E/S estimate of 461 million.
Volumes and earnings were hit in the quarter by "a particularly long winter" in Europe and North America, fewer trading days and cost inflation, Lafarge said, adding that the first quarter typically represented a small part of its results and was not indicative of full-year trends.
($1 = 0.7659 euros)