Lafarge Net Profit Up 60 Percent in 2003
PARIS (AP) _ The strong euro hit operating profits at Lafarge SA last year, but the world’s largest cement maker reported a hefty increase in net income Thursday and promised ``sustained growth″ as an economic recovery takes hold in 2004.
The French construction materials giant said net profit rose 60 percent to 728 million euros ($910 million) in 2003 from 456 million euros the previous year, when earnings were weighed down by a 300 million euro charge.
But Lafarge said the euro’s strength against the dollar and other currencies accounted for most of the 9 percent drop in operating profit to 1.93 billion euros ($2.42 billion) from 2.13 billion euros.
The group’s main business, cement, saw operating profit slide 9 percent to 1.47 billion euros ($1.83 billion) despite a 4.6 percent increase in volumes. Stripping out currency effects, the division’s operating profit rose 4 percent, Lafarge said.
Lafarge does about a quarter of its business in the United States and Canada through its majority-owned subsidiary Lafarge North America Inc.
Lafarge chief executive Bernard Kasriel said the company was expecting 2004 to bring ``progressive improvement″ in construction markets _ closely watched by experts as an indicator of broader economic trends.
``In these conditions our continuing efforts to improve performance allow us to predict a sustained growth in our operational earnings throughout 2004, excluding currency effects,″ Kasriel said.
The group booked the 300 million euro charge in 2002 to cover fines levied by European Union antitrust authorities for Lafarge’s role in setting gypsum and cement prices with a cartel of other building materials suppliers.
Lafarge is appealing the fines and expects them to end up being much lower than the provision it set aside.
The group also said it had cut net debt by almost a third to 7.06 billion euros ($8.82 billion) in the year to December 2003.
Shares in Lafarge SA were up nearly 1 percent to close at 67.55 euros ($84.42) in trading in Paris.