Lafarge SA Reported an 80 Percent Plunge in Profit for The Second Quarter

French cement giant Lafarge SA (LFRGY. PK, LFGEF. PK) Friday reported an 80 percent plunge in profit for the second quarter, hurt by charges. Adjusted profit was flat with last year, amid a 5 percent rise in revenue. Net income group share plummeted to 57 million euros ($70 million) from 289 million euros. Earnings per share were 0.20 euros, a sharp decline from last year s 1.01 euros. Prior-year results have been restated. The firm recorded a non-recurring charge of 200 million euros in the second quarter for the impairment of Greek assets. Excluding asset impairment and restructuring charges, net income group share was 294 million euros, flat with last year. Sales rose to 4.261 billion euros from 4.054 billion euros, driven by price actions across all product lines in response to cost inflation. Sales growth also reflected higher cement volumes in North America and Asia, as well as favorable foreign exchange. Cement volumes dropped 3 percent to 38.4 million tons, reflecting divestments and volume declines mainly in Western as well as Central and Eastern Europe. Aggregates volumes slipped 1 percent to 51 million tons owing to lower construction activity in Western Europe. Bruno Lafont, CEO of the company, said, Economic conditions remain challenging for many parts of the world and we remain prudent on our outlook. But even in a lower growth volume environment, our actions to generate sales growth and cash, and to improve returns, led to a third consecutive quarter of positive trends. Lafarge achieved 100 million euros of cost savings in the second quarter and 170 million euros in the first half of the year. The firm said it is on track to reach at least 400 million euros of cost savings for the year. Net debt was reduced by 1.7 billion euros from 12.5 billion euros as of June 30, 2011. The firm confirmed its objective to secure at least 1 billion euros of divestments this year as part of improving returns and reducing net debt to less than 10 billion euros as soon as possible in 2013. The company continues to see higher cement demand and expects to maintain its estimated market growth of between 1 and 4 percent in 2012 compared to 2011. Higher pricing is expected for the year and cost inflation is estimated to increase at a lower rate than in 2011. The stock closed in Paris on Thursday higher by 4.46 percent at 36.17 euros on 1.7 million shares. Source: uaecement