Lafarge profits inch higher, cuts demand estimates
France's Lafarge, the world's biggest cement maker, said Friday its first half earnings rose slightly but it trimmed back its 2010 forecasts amid doubts about the strength of the global recovery.
Lafarge said its six months to June net profit was up six percent to 393 million euros (507 million dollars) as sales slipped three percent to 7.71 billion euros.
Operating profit dropped five percent to 1.07 billion euros.
"We have adjusted our 2010 forecasts for cement demand to between a fall or rise of one percent, instead of the zero to five percent range given previously," chief executive Bruno Lafont told a conference call.
While underlying demand reflects fundamental need, the company decided to revise down the forecasts "in light of uncertainties on the economic recovery," Lafont said.
Lafarge also wanted to concentrate on reducing debt -- more than 15 billion euros at end-June -- and would take appropriate measures for 2011, he said, adding: "We are cautious on the short-term but confident after that."
Lafarge will seek 2011 cost cuts of more than 200 million euros, with similar savings for this year likely to be exceeded.
Investment will drop to below one billion euros from 1.3 billion euros this year.
Lafont said tighter government finances, meaning less money for public infrastructure, "needed to watched closely for now but were not year a real worry."
© 2010 AFP