Lafarge SA (LG), the French cement maker, plans cost savings of more than 300 million euros ($403 million) in 2013, Natixis reported, following a management presentation to investors in London.
“In the long term, Lafarge does not want to make a large- scale acquisition but instead focus on organic growth by expanding its capacity in emerging countries,” Rafic El Haddad and colleagues at Paris-based bank Natixis wrote in a research note today. Chief Executive OfficerBruno Lafont “intends to concentrate on certain buoyant markets” including Algeria, Brazil, India, Russia and sub-Saharan countries, they wrote.
The company will sell at least 1 billion euros of assets this year, halve its dividend and shrink capital expenditure by 400 million euros, the CEO said Feb. 17. Lafarge also aims to reduce costs in 2012 by at least 400 million euros.
Lafont seeks to repair a credit rating that has fallen below investment grade amid higher raw material prices. Standard & Poor’s and Moody’s Investors Service cut the company’s credit rating to “junk,” or lower than investment-grade, in 2011. A spokeswoman for Lafarge said she couldn’t immediately comment.
Shares of Lafarge were down 0.6 percent at 35.18 euros at 11:47 a.m. in Paris trading. They have risen 29 percent this year, giving it a market value of 10.1 billion euros.
Natixis has a “buy” recommendation on the stock.
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