Orascom Cement contributes in Lafarge's 39-pct profit rise

PARIS: Demand for cement is still rising after 20 years of uninterrupted growth, French building materials group Lafarge noted Thursday when reporting a 39-percent rise in net profit last year. Net profit of 1.9 billion euros ($2.77 billion) exceeded analyst forecasts for 1.7 billion euros and the group stood by its targets through to 2010, saying that recently acquired Orascom Cement of Egypt put it in a strong position in rapidly expanding markets. Sales rose four percent to 17.6 billion euros. Lafarge, the world s biggest cement company, said it expected profits to grow further this year owing to new growth in world demand despite the weakness of demand in the United States and the slowdown in Spain. Chief executive Bruno Lafont said the company confirmed its high 2010 targets for earnings per share of 15 euros and a free cash flow of more than 3.5 billion euros. In 2007, free cash flow, a measure of the capacity of the company to generate funds for investment, rose 23 percent to 1.7 billion euros. World demand for cement has experienced uninterrupted growth for nearly 20 years despite economic fluctuations, he said. The acquisition of Orascom Cement, announced in December, and the construction of new capacity in strongly growing markets enabled Lafarge to be ideally positioned to benefit fully from this growth, he said. Its Excellence 2008 plan, launched in 2006, would achieve cost cuts of 400 million euros at the end of this year, exceeding the initial target of 340 million euros, he said. For 2008, Lafont said the company expected further gains even as it faced the likelihood of higher transport and energy costs. – AFP