JONA (dpa-AFX) - Shares of LafargeHolcim (HCMLY.PK, HCMLF.PK) were gaining around 5 percent in the morning trading in Zurich after the Swiss cement giant reported Thursday a profit in its fourth quarter, compared to loss last year, despite weak revenues and volumes.
Looking ahead to fiscal 2017, the company, formed by the combination of French Lafarge and Swiss peer Holcim, said it expects double-digit like-for-like adjusted operating EBITDA growth over 2016 and recurring earnings per share growth of more than 20 percent. The company is also on track to reach its 2018 targets.
In addition, the company proposed a dividend of 2.0 francs per share, and announced a share buyback program of up to 1 billion francs over 2017-2018
Eric Olsen, CEO of LafargeHolcim said: '2016 was a year of accelerating earnings momentum.... I am also pleased with the positive trajectory of markets such as the US, Nigeria, India and key countries in Europe which we have singled out as important drivers for growth in 2017 and beyond.'
In response to allegations involving legacy Lafarge operations at the company's plant in Syria, LafargeHolcim said it commenced an internal independent investigation under the supervision of the Finance and Audit Committee of the Board.
The allegations against the company's Syrian operations included specifically that company personnel had engaged in dealings with certain armed groups and with sanctioned parties during 2013 until the plant was ultimately evacuated in September 2014.
Following the internal review, Lafarge's board has taken several decisions, including the creation of a new Ethics, Integrity & Risk committee.
For the fourth quarter, net income was 535 million Swiss francs, compared to loss of 2.86 billion francs last year. The prior year's results included loss on disposals of 2.52 billion francs.
Recurring net income Group share was 480 million francs, compared to loss of 15 million francs in the same period last year. Recurring earnings per share were 0.79 francs, compared to loss of 0.02 francs a year ago.
The company noted that pricing, synergies and disciplined cost management drive strong fourth-quarter earnings and cash-flow growth.
Operating EBITDA grew 30.9 percent to 1.30 billion francs from 988 million francs last year, while adjusted operating EBITDA increased 15.5 percent to 1.61 billion francs.
Net sales for the quarter, meanwhile, declined 12.3 percent to 6.53 billion francs from 7.44 billion francs last year. On a like-for-like basis, net sales decreased 1.4 percent.
Sales of cement fell 16 percent from last year to 55.9 million tonnes, and the decline was 5.8 percent on a like-for-like basis, due in part to demonetisation in India, tough trading conditions in Indonesia and last year's unusually favorable weather conditions in the US.
Sales of aggregates declined 6.1 percent to 71.2 million tonnes, and sales of ready-mix concrete dropped 8.4 percent to 13.1 million tonnes.
Further, Bruno Lafont, Co-Chairman of the company's board of directors, has decided that he will not stand for re-election at the next Annual General Meeting.
LafargeHolcim shares were trading at 60.65 francs, up 4.57 percent.
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