Holcim, Lafarge Shares Up on Quarterly Earnings

Zurich/Paris: Swiss cement maker Holcim reported a jump in first-quarter net profit on Thursday, helped by asset sales, while its French merger partner Lafarge posted a better than expected rise in operating profit. Shares in both companies climbed after the results as analysts said the numbers boded well ahead of a Holcim shareholder meeting next week, when two-thirds of investors in the Swiss company need to back the merger for it to proceed. The plan to create the world's biggest cement maker also got a boost overnight ahead of the results, when the Swiss company's second-largest shareholder Eurocement said it now supported the merger unveiled a year ago. Lafarge shares rose 4.5 per cent to 65.79 euros by 0708 GMT (12:38 p.m.) while Holcim was 2.0 per cent higher at 76.35 Swiss francs. Analysts focused on Lafarge's operating profit (EBITDA) beating forecasts with a 17 per cent rise to 403 million euros and the French company being on track to deliver cost savings targets for the year. "Overall, a better than expected performance from Lafarge," Bernstein analysts said in a note. "This slight reversal of fortunes compared to Holcim ... should be good for the balance of the shareholder vote." The two companies unveiled a "merger of equals" last April to create the world's biggest cement maker, but terms were revised in March after shareholders in the Swiss company complained they were getting a raw deal. Holcim investors had watched the relative performance of the two companies diverge since the merger was announced. The rise in the Swiss franc against the euro and worries about the proposed management structure were other factors prompting its shareholders to push for a better deal. Holcim reported a net profit of 310 million francs ($329 million), up from 80 million a year earlier, helped by the sale of its minority stake in Siam City Cement, but below an average forecast of 340 million. Some analysts said Holcim's performance was tarnished by a poor showing in Africa and the Middle East, where sales fell 13.5 per cent. Lafarge reported a net loss of 96 million euros ($106.6 million) for the quarter, against a 135 million loss a year before. ($1 = 0.9414 Swiss francs) ($1 = 0.9004 euros) .© Thomson Reuters 2015

Holcim, Lafarge Shares Up on Quarterly Earnings

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