LafargeHolcim earnings dragged down by Nigeria in first half of 2016


Updated Tue, 09 Aug 2016 10:10:47 GMT

Switzerland: LafargeHolcim has blamed lower prices and gas shortages in Nigeria for a drop in its adjusted operating earnings before interest, taxation, depreciation and amortisation (EBITDA) in the first half of 2016. Its adjusted operating EBITDA fell by 6.7% year-on-year to Euro2.33bn from Euro2.5bn in the same period in 2015. Net sales fell by 6.2% to Euro12.3bn from Euro13.1bn.

“Without the effect of Nigeria, where our plants were affected by gas shortages, adjusted operating EBITDA would have increased by 13% in the quarter. Nigeria is a high growth market and we are adapting our plants to reduce our dependency on gas to restore supply and capture growth. We expect these measures to take effect by the end of the year,” said Eric Olsen, CEO of LafargeHolcim.

LafargeHolcim’s cement sales volumes fell by 3.7% to 119Mt from 124Mt. Its Asia Pacific business region reported that cement sales remained stable during the half year at 60.7Mt as markets in the Philippines, Bangladesh, Vietnam and Sri Lanka increased volumes and markets in Indonesia and Malaysia declined. European cement sales fell by 2.7% to 19.6Mt from 20.1Mt. In Latin American sales fell by 13.2% to 11.8Mt from 13.6Mt mainly due to the poor market in Brazil. The Middle East Africa region remained stable at 21.7Mt, with growth in Algeria, Egypt, Lebanon and Morocco partly compensating for problems in Nigeria. Despite this, sales volumes of cement in this region fell by 2.3% year-on-year to 10.9Mt in the second quarter of 2016. In North America sales volumes of cement fell by 2.7% to 8.8Mt in the half-year from 9Mt due to weaker demand in Canada. However, demand in the US construction industry helped overall sales to rise by 5.1% to Euro2.21bn.