Lafarge SA, the world's biggest cement maker, said second-quarter profit fell 15 percent and pledged to extend costs cuts and asset sales to reduce its debt as it trimmed its forecast for demand in 2010.
Net income fell to 329 million euros ($429 million) from 387 million euros a year earlier, the Paris-based company said in a statement today. That compares with an average estimate of a 324 million-euro profit in a Bloomberg survey of six analysts. Revenue rose 2 percent to 4.44 billion euros in the quarter.
"Based on second quarter activity, we have lowered our full-year volume estimates for western and eastern Europe and increased our volume estimates for North America," Lafarge said in the statement.
The company said it expects cement volumes in its markets to increase 3 percent at best, less than a previous forecast for an increase of as much as 5 percent. In the worst case, they may fall by 1 percent instead of being unchanged, Lafarge said.
Lafarge Chief Executive Officer Bruno Lafont will seek to cut costs by more than his previous goal of 200 million euros in 2010, and said he will invest no more than 1 billion euros in 2011 as Europe's most indebted cement maker tries to keep its investment-grade credit rating. He aims to beat a previous goal of as much as 500 million euros of asset sales this year.
The company's net debt fell to 15.16 billion euros on June 30, down 1 percent from 15.39 billion euros a year earlier. Foreign exchange translation inflated Lafarge's debt by 1 billion euros compared to year end, the company said.
Lafarge cut costs by 200 million euros this year, of which 120 million euros are "structural," the company said. The company said it has already "secured" 350 million euros for divestments so far this year.
