PARIS (Reuters) - French cement-maker Lafarge LAFP.PA confirmed its debt reduction targets for this year and next on Wednesday as it posted 4 percent like-for-like growth in third-quarter sales and core profit.
The company also set a new goal to boost earnings before interest, tax, depreciation and amortization (EBITDA) by at least 1.1 billion euros ($1.5 billion) over 2015 and 2016, with 600 million through cost cuts and 500 million from innovation.
“We have accelerated and will complete our 2012-2015 cost reduction and innovation plan one year ahead of our initial objective,” Chief Executive Bruno Lafont said in a statement.
“Building on this momentum, we today announce new cost reduction and innovation targets for 2015-2016.”
Lafarge wants to reduce its debt pile - which results mainly from its 2008 purchase of Egypt’s Orascom and has led to “junk” ratings from agencies Standard & Poor’s and Moody’s - below 10 billion euros this year and 9 billion in 2014.
To regain its investment grade, Lafarge has been shedding non-core assets. Net debt was 10.94 billion euros as of September 30, down 10 percent from a year ago, the company said.
In the quarter, Lafarge received 900 million euros from divestments, including the sale of its gypsum operations in the U.S. for 500 million and its cement operations in Ukraine for 100 million.
Lafarge confirmed its forecast for the cement market to grow up to 3 percent this year, with better trends in the second half, thanks to a recovery in the United States, growth in most emerging markets and stabilization at a low level in Europe.
Swiss rival Holcim HOLN.VX said on Tuesday it did not expect 2013 sales volumes to reach last year’s levels, partly due to sluggish demand in the key emerging markets of India, Brazil and Mexico.
Reporting by James Regan and Natalie Huet; Editing by Blaise Robinson and Mark John