LafargeHolcim Falls as Earnings Disappoint

LafargeHolcim shares tumbled more than 3% on Thursday after the world's largest cement producer missed first-quarter earnings forecasts due to weak demand from India, Brazil and Nigeria.

Adjusted EBITDA for the first quarter fell to Sfr824 million ($850 million), down 21.5% on the same period last year, or 17% lower at constant exchange rates. Sales fell 5.5% to Sfr6.1 billion, but rose slightly after stripping out currency movements.

The results "are a negative for the shares, given the c. 12% miss vs. consensus," wrote Goldman Sachs analysts. The broker said the results also raised questions about claimed synergies from the group's formative merger of France's Lafarge and Switzerlands Holcim. Reported incremental synergies of Sfr104 million in the quarter were "tracking below the full-year target of 450 million francs, or 113 million per quarter," noted Goldman Sachs.

Jonas, Switzerland-based Lafarge Holcim's share price has fallen more than 40% since mid-July, when the combined group began trading on the Zurich exchange.

CEO Eric Olsen attempted to play down the poor results, noting that the period was typically the company's slowest quarter, and insisted LafargeHolcim was still on track to deliver full year EBITDA growth in the high single digits.

"We know that we have more to do to increase momentum in 2016," Olsen said in a statement. "We are on track with our plan and we see favourable underlying trends."

LafargeHolcim said it had already secured one-third of its 2016 disposals target of Sfr3.5 billion and is in "advanced discussions" with potential buyers. Olsen also flagged further sales in 2017, noting that the company had identified additional assets for disposal. "The overall amount would be less in 2017...but it will still be a substantial effort," the CEO said on a call with journalists.

LafargeHolcim shares traded Thursday at Sfr42.63, down Sfr1.44,  or 3.3% on their Wednesday close.