LafargeHolcim Swings To FY Profit, Outlook Positive

by Ike Obudulu Posted on March 7th, 2019

Cement giant LafargeHolcim (HCMLY.PK,HCMLF.PK) Thursday reported a profit in its fiscal year 2018, compared to loss last year, driven by higher sales with increased cement volume. Recurring EBITDA margin, meanwhile, dropped from last year. Looking ahead, the company confirmed its fiscal 2019 outlook, noting that it is expecting further acceleration of growth and earnings dynamic in the new year.

The company said it continues to expect that solid global market demand would continue in 2019. The company still expects net sales growth of 3 to 5 percent and recurring EBITDA growth of at least 5 percent, both on a like-for-like basis, delivering target of Strategy 2022.

For the 2018 financial year, the Board is proposing a dividend from the capital contribution reserves in the amount of 2 Swiss francs per registered share.

Jan Jenisch, CEO, said, “Our momentum accelerated in the second half of 2018 during which we exceeded our sales targets while profitability increased over-proportionally. We completed a very successful 2018 with a double-digit EPS growth and progressed significantly towards our deleveraging target.”

For fiscal 2018, net income attributable to shareholders was 1.50 billion francs, compared to last year’s loss of 1.68 billion francs.

Attributable net income before impairment and divestments was 1.57 billion francs, compared to last year’s 1.42 billion francs. Adjusted earnings per share were 2.63 francs, compared to 2.35 francs in the prior year.

Recurring EBITDA reached 6.02 billion francs, up 0.4 percent on a reported basis, and up 3.6 percent on a like-for-like basis, with Cement, Aggregates and Ready-Mix Concrete segments all contributing to the solid outcome. Recurring EBITDA margin, meanwhile, dropped to 21.9 percent from 22.2 percent a year ago.

Net sales grew 1.6 percent to 27.47 billion francs from 27.02 billion francs last year. Net sales grew 5.1 percent on a like-for-like basis for the full year, largely driven by higher cement volumes.

Sales of cement edged up 0.8 percent on a reported basis and 4.4 percent on LFL basis to 221.9 million tonnes. Sales of aggregates dropped 1.8 percent to 273.8 million tonnes.

In its fourth quarter, recurring EBITDA grew 1.9 percent year-over-year to 1.67 billion francs, and recurring EBITDA margin grew to 24.4 percent from 23.6 percent last year. Net sales, meanwhile, dropped 1.4 percent to 6.83 billion francs with flat cement sales and lower sales of aggregates.

LafargeHolcim shares were trading at 49.52 francs, up 0.20 percent.

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Ike Obudulu

Ike Obudulu

Versatile Certified Fraud Examiner, Chartered Accountant, Certified Internal Auditor with an MBA in Finance And Investments who has both worked for and consulted with some of the world's largest companies on main street and wall street in over 20 countries, Ike brings his extensive reporting and investigations experience to bear on his role as Chief Editor.
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