* Raises full year guidance
* CEO says expects stimulus plans to help in second half of year
* Cement maker expects to reach 2022 goals a year early (Recasts, adds CEO comments, shares)
ZURICH, April 23 (Reuters) - LafargeHolcim raised its full year guidance on Friday after reporting higher sales and doubling its operating profit during the first quarter, sending a positive signal for the global construction sector.
The world’s largest cement maker said it was seeing “fantastic growth momentum”, with better results in all of its regions as building resumes after pandemic-driven shutdowns last year.
The Swiss company is also looking forward to the impact of massive stimulus programmes announced as a result of the COVID-19 pandemic, such as United States President Joe Biden’s $2.3 trillion infrastructure plan.
“The outlook for the year remains very positive,” LafargeHolcim CEO Jan Jenisch told reporters. “We believe growth momentum will continue throughout the year.”
LafargeHolcim posted net sales of 5.36 billion Swiss francs ($5.85 billion) for the three months to the end of March, up 1.3% from 5.29 billion francs a year earlier, beating analyst forecasts for 5.11 billion francs.
Recurring operating profit (EBIT) rose 102% to 528 million francs, beating forecasts of 310 million, helped by higher profit margins as the company cut costs during 2020.
As a result, it raised its full year guidance, saying it now expects recurring operating profit of at least 10% for 2021 on a like-for-like basis. It had previously guided for an increase of “at least 7%”.
LafargeHolcim said it was also on track to deliver the targets of its Strategy 2022 by the end of 2021, one year in advance of the original plan. New targets could be unveiled later this year.
The impact of stimulus programmes would be seen in the second half of 2021, Jenisch added, but already the signs were good.
“In the U.S. we have a very good outlook,” Jenisch said. “We are excited for the Biden Build Back Better plan ... however, we already have well-filled order books for all our products.”
LafargeHolcim shares were indicated 2% higher in premarket activity The company’s shares have gained 57% in the last 12 months, outperforming the Stoxx Europe 600 Construction Materials Index
Analyst Bernd Pomrehn at Bank Vontobel described the results as a “very strong start to the year” and said they were a positive signal for the rest of the construction sector.
Germany’s HeidelbergCement’s first-quarter earnings and sales significantly beat market expectations, prompting it to release preliminary figures ahead of schedule earlier this month.
Construction chemicals maker Sika this week hiked its sales guidance for the year after seeing a strong start in Europe and Asia.
$1 = 0.9169 Swiss francs Reporting by John Revill; editing by Brenna Hughes Neghaiwi and Jason Neely
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