French cement maker Lafarge’s (LG.FR) net profit was stable in the third quarter despite lower sales thanks to strong demand from the emerging markets.
The company’s third-quarter net profit was steady at 304 million euros ($410 million), while total revenue fell 4% to EUR4.24 billion. A survey carried out by financial information provider Factset showed analysts expected an average profit of EUR331 million and average sales of EUR4.28 billion.
Sales data included a EUR286 million cost from currency swings, the company said.
Lafarge’s revenue fell as the company sold assets to reduce its debt load which has weighed on its operations in the past. During the third quarter profitability increased as the company raised output at the plants it still owns to supply a rising demand in emerging markets.
The group, the world’s largest cement group by revenue has struggled with an oversized debt, which has loaded its balance sheet since the world economy slowed.
Lafarge’s indebtedness, which peaked at EUR17 billion in 2008, stems from a series of acquisitions culminating in the EUR8.8 billion takeover of Egyptian rival Orascom Cement. The company said its debt stood at EUR10.9 billion at the end of September, down from EUR12.2 billion a year earlier.
Lafarge will maintain its debt reduction policy through cost-cutting and asset sales, Chief Executive Bruno Lafont said. The company expects its debt to fall below EUR10 billion by the end of 2013 and below EUR9 billion by the end of 2014.
Source: MarketWatch
