LafargeHolcim Raises Sales Outlook in Battle Against Costs
(Bloomberg) -- LafargeHolcim Ltd. raised its outlook for sales growth this year as Europe’s biggest cement maker managed to beat back higher energy prices that are pushing up production and transport costs.
- Chief Executive Officer Jan Jenisch appears to be keeping his five-year plan to improve profitability on track after quarterly profit published Friday surpassed the average forecast.
- The Swiss producer was able to sell more cement at better prices in a bid to overcome the higher oil costs that have been feeding into the expenses of manufacturers like chemical maker BASF SE, which also reported earnings Friday.
- Jenisch is trying to steady the LafargeHolcim ship. The company suffered from a loss of investor confidence following its creation in a Franco-Swiss merger and remains entangled in a French probe into possible terrorist payments in war-torn Syria.
- Overcapacity, falling prices in some markets and energy costs are a challenge for cement makers. LafargeHolcim’s results are a strong indicator for the wider industry. Rivals Vicat SA and HeidelbergCement AG are set to report on Nov. 6 and 8 respectively.
- The shares rose as much as 5.4 percent, the most intraday since May 2017, and were trading 2.4 percent higher at 42.90 francs as of 9:22 a.m. in Zurich. They are still down by about a fifth since the start of the year.
- Vontobel analyst Bernd Pomrehn kept his recommendation to buy shares partly because of the expectation that earnings growth will continue in the last quarter