Saint-Gobain Sees $1.7 Billion Hit From Energy-Price Surge
Saint-Gobain Sees $1.7 Billion Hit From Energy-Price Surge
(Bloomberg) -- Saint-Gobain raised its expectations for cost inflation due to Europe’s energy crisis by more than a third to about 1.5 billion euros ($1.7 billion) this year, saying it will pass on much of the impact to customers.
The construction materials maker still stuck to its full-year financial targets as it predicts a “very strong” rise in operating income, it said Wednesday. The French company plans to offset record energy prices by charging more for products including plaster, roofing and insulation materials.
Major price spikes for gas and electricity in Europe prompted Saint-Gobain to raise its inflation forecast by 36%, predicting that 1.1 billion euros will hit the company during the second half alone. Global energy markets have tightened just as the heating season starts in the northern hemisphere, with limited supply failing to catch up with recovering demand.
Saint-Gobain said it has forward hedges for natural gas and electricity in place in Europe that cover half of its usage during the fourth quarter and 65% of next year. The company is also holding an investor day Wednesday.
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