Lafarge beats expectations

Lafarge reported better than expected performance in Q1, supported by strong Middle East operations and firm pricing, but still saw a net loss.

{reg} Lafarge's operating income fell 35% from Ôé¼512 million to Ôé¼335 million, but still beat analyst expectations. Overall sales were down 9% from Ôé¼4 billion to Ôé¼3,62 billion for the quarter, with cement sales also down 9% to Ôé¼2,34 billion on lower volumes led by difficult market conditions and adverse weather in Europe and North America. Pricing remained firm overall, in line with inflation, Lafarge said in a press release.

Net income declined from Ôé¼150 million to a loss of Ôé¼17 million.

Emerging markets operating income rose from Ôé¼385 million to Ôé¼406 million, recording volume growth in the Middle East of 17%, in Africa of 9%, and in Asia of 7%.

Lafarge also reported progress on its Ôé¼4,5 billion program to strengthen financial structure, having raised Ôé¼1,5 billion of capital raising in April 2009. Lafarge also reported good progress on its Ôé¼400 million cost savings program through 2011 and has announced more than Ôé¼230 million in divestitures in 2009 out of its Ôé¼1 billion target for 2009.

The outlook on volumes is soft due to further weakening of conditions in Western and Eastern Europe. For 2009, cement volumes in Lafarge's markets are expected to be down -2 to -5% overall, with significant contrasts between markets. Pricing is expected to remain firm overall.