ZURICH (Reuters) - LafargeHolcim reported better-than-expected operating profit in its second quarter and reaffirmed its guidance, easing the pressure on management struggling to make a success of the mega-merger that created the building materials giant.
The Switzerland-based company reported adjusted operating profit before interest, tax, depreciation and amortisation of 1.71 billion Swiss francs (1.34 billion pounds) in the three months ended June 30.
That was up 6 percent on a like-for-like basis and better than the 1.62 billion francs expected on average by analysts in a Reuters poll. It has forecast at least a high-single-digit percentage increase in adjusted EBITDA this year.
After a 17 percent fall in the first quarter, analysts said the company would need to report at least flat growth in the second quarter if LafargeHolcim was to achieve the target.
“Our focus on pricing and synergies is delivering visible earnings momentum, driving a 210 basis points year-on-year improvement in operating margins and a 6 percent increase in like for like adjusted operating EBITDA in Q2,” Chief Executive Eric Olsen said in a statement on Friday.
Underlying operating profit would have risen 13 percent if not for gas shortages in Nigeria that affected its plants, he added, saying the company was adapting plants to reduce dependency on gas in measures to take effect by year’s end.
The company has already exceeded its 2016 goal of making divestments worth 3.5 billion francs and said it had extended the programme to 5 billion francs by the end of next year.
Reporting by Michael Shields; Editing by Rupert Pretterklieber
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