* Swiss firm must sell assets ahead of Lafarge merger
* Q1 sales fall 5.4 pct on weakness in emerging currencies
* Net profit down 57.5 pct on tough comparison
(Recasts, adds CFO, CEO comment, details on disposal process)
By Caroline Copley
ZURICH, April 28 Holcim said there was
strong interest in the market for assets it must sell to get the
go-ahead for its merger with France's Lafarge, as
foreign currency swings weighed on its first-quarter results.
The two companies need to shed around 5 billion euros ($6.9
billion) in assets to try to persuade regulators to back the
proposed merger, which would create the world's biggest cement
maker with $44 billion in annual sales.
The Swiss firm gave scant details about what divestment
packages it was working on, but said there was "huge" interest
from players in mature and emerging countries as well as private
"We have a very attractive divestment portfolio and we will
be very successful in placing these assets into the market,"
Chief Financial Officer Thomas Aebischer told a conference call.
He declined further comment on the merger, other than to say
he still expected it to complete in the first half of next year.
Antitrust authorities are forecast to take a hard look at
the deal, which will create a group with a market capitalisation
close to $60 billion. Analysts have speculated that disposals
may occur in countries such as France, Germany, Romania, Serbia,
Canada, Morocco and the Philippines.
The proposed merger overshadowed Holcim's first quarter
results, which were hit by unfavourable currency moves,
particularly in Latin America and Asia. Sales fell 5.4 percent
to 4.09 billion Swiss francs ($4.64 billion).
Excluding the impact of foreign exchange, sales rose 7.8
percent, helped by a mild winter in Europe which boosted
construction work. But Holcim said volume growth did not
necessarily indicate that a European recovery was under way.
"We need to be a bit more cautious to understand (what) the
real trend in Europe is compared with the effect of the mild
winter," Chief Executive Bernard Fontana said.
Net profit dropped 57.5 percent to 80 million francs
compared to the previous year when figures were boosted by the
sale of its 25 percent stake in Cement Australia.
By 0856 GMT, shares in Holcim were flat at 78.85 francs,
underperforming a 0.9 percent firmer European construction
Ahead of the merger, Holcim is pressing on with its savings
programme to cut costs and expand in faster-growing emerging
markets with the aim of adding 1.5 billion Swiss francs ($1.70
billion) to operating profit by the end of this year.
The Jona-based company said it was on track to achieve this
goal. Strict cost control helped it report a 9.3 percent rise in
operating profit to 295 million francs.
Holcim confirmed its outlook for rising cement volumes
across all regions and organic growth in operating profit, as
well as better operating margins this year.
($1 = 0.8810 Swiss francs)
($1 = 0.7227 Euros)
(Editing by Matt Driskill, John Stonestreet)