April 26, 2018 / 4:13 PM / a month ago

French group St Gobain Q1 sales dip but keeps 2018 earnings goal

PARIS (Reuters) - French construction materials group St Gobain (SGOB.PA) reported a dip in first quarter sales on Thursday, as currency swings such as a drop in the dollar impacted business, although the group kept its general 2018 financial outlook.

FILE PHOTO: The Saint-Gobain logo is seen on the company headquarters building at the La Defense business district in Courbevoie, outside Paris, France, February 19, 2018. REUTERS/Gonzalo Fuentes

Sales fell 1.8 percent from a year ago to 9.755 billion euros (8.5 billion pounds), as construction work was affected by an unusually cold winter in Europe, while foreign exchange movements also took their toll.

According to an Inquiry Financial poll conducted for Reuters, analysts had on average expected Q1 sales of 9.88 billion euros.

St Gobain, embroiled in a long-running dispute with Swiss construction group Sika (SIK.S), said there had been a 4.7 percent negative impact from the depreciation of the dollar, as well as a fall in certain Asian and emerging market currencies against the euro.

    A rise in the euro can make products more expensive for overseas buyers outside the euro zone, while revenues earned in U.S. dollar zones lose value when translated back into euros.

    However, St Gobain stuck to its 2018 financial goals, saying that higher prices charged for its goods would help offset some of those negative trends.

    “Underlying trends nevertheless confirm the improvement of our markets in most of our countries in Europe, particularly France, as well as good momentum in North America and emerging countries,” said St Gobain chairman and chief executive Pierre-Andre de Chalendar.

    “For 2018 as a whole, we confirm our objective of a further like-for-like increase in operating income,” he added.

    Reporting by Gilles Guillaume; Editing by Sudip Kar-Gupta

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