CORRECTED – UPDATE 2-Lafarge sees brighter year after 2009 profit sags

(Corrects third paragraph to show profit from continuing
operations was 2.477 billion euros not 2.8 billion euros;
corrects third paragraph to show analysts’ mean estimate for
profit on continuing operations was 2.6 billion euros not 16.4
billion; corrects second bullet point to show as net income not
profit from continuing operations; and specifies reporting
periods in first two bullet points)

* 2009 profit from cont ops down 30 pct to 2.447 bln euros

* 2009 net income down 54 pct to 736 mln euros

* Sees global cement demand up 0-5 percent in 2010

* 300-500 mln euros in asset sales in 2010

* Shares down 2.91 percent

(Adds conference call, Q4 figures, more detail)

By Michel Rose and Gilles Guillaume

PARIS, Feb 19 (BestGrowthStock) – The world’s biggest cement maker
Lafarge (LAFP.PA: ) expects global demand to rise up to 5 percent
in 2010 after posting a fall in 2009 earnings to slightly below
expectations as the economic crisis hit construction activities.

The economic decline in the United States and Europe in 2009
led to a drop in construction projects and a subsequent fall in
cement demand while building activities in emerging markets
remained strong.

The French group on Friday reported a 30 percent fall in
profit from continuing operations to 2.447 billion euros ($3.36
billion) just below a 2.6 billion euro mean estimate in a
Thomson Reuters I/B/E/S poll, on sales down 17 percent to 15.884
billion euros.

“2010 is presenting itself more favourably than 2009 for
Lafarge,” Chief Executive Bruno Lafont told a conference call
with reporters.

“This year, we will have a more balanced growth, with a
stabilisation in developed countries compared to the decline (in
2009), and also the continuing growth in all emerging
countries.”

The group proposed a dividend of 2 euros per share.

Lafarge shares were down 2.91 percent at 49.30 euros at 0858
GMT. They have have lost 12 percent since Jan. 1, after gaining
more than 53 percent in 2009.

Analysts at Oddo said the results were below expectations,
with the U.S. and central Europe the main disappointments, and
the outlook was cautious. Oddo maintained its “buy” rating,
saying Lafarge was trading below its historic multiples.

Lafarge said after what had been a “challenging year”, it
expected global cement demand in its markets to increase between
0 percent and 5 percent in 2010.

In 2009, global cement demand rose some 6 percent, thanks to
an infrastructure boom in China, which offset the slump in the
construction sector in Europe and the United States.

EMERGING MARKET STRENGTH

“Emerging markets continue to show strength and Lafarge
forecasts that cement volumes in these markets will continue to
drive demand in 2010,” the group said.

“For developed markets, the group expects that demand will
start to recover slowly during the second half of the year.”

In November, Chief Executive Bruno Lafont warned that a
recovery would have to wait till the second half of 2010,
especially in mature markets like the United States, although
emerging markets like China could come back sooner.
[ID:nL6713710]

The group’s 2009 net income fell 54 percent to 736 million
euros, while the poll of 18 analysts showed a consensus of 1.006
billion euros.

Its current operating margin was down to 15.6 percent from
18.6 percent.

In the fourth quarter, the group had a net loss of 38
million euros after one-off items, which included impairment
losses on some cements assets in western Europe and the
settlement of the USG (USG.N: ) litigation. In 2008, the group had
a net profit before one-off items of 40 million euros.

Under an agreement announced last December, Lafarge agreed
to pay American building group USG some $80 million in 2009 and
another $25 million before the end of 2010. [ID:nWNBB8542]

Without these one-off elements, Lafarge’s net income fell 67
percent to 98 million euros during the last three months of 2009
compared with 293 million euros the previous year.

Lafarge said it would sell assets in the range of 300
million to 500 million euros this year.

Its net debt was reduced to 3.09 billion euros at the end of
2009.

For more on the results, click on [ID:nBW187174A]
($1=.7377 Euro)

Investing Analysis
(Reporting by Michel Rose, editing by Marcel Michelson and
Karen Foster)

CORRECTED – UPDATE 2-Lafarge sees brighter year after 2009 profit sags