Lafarge FY14 net profit falls 30% to RM256 mil

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KUALA LUMPUR (Feb 26): Lafarge Malaysia Bhd saw its net profit fall 30% to RM256 million or 30.1 sen a share for the financial year ended Dec 31, 2014 (FY14), due to continued price pressures and higher operating costs.

Meanwhile, revenue of the country’s largest cement producer had eased 4% year-on-year to RM2.7 billion.

The group proposed a fourth interim single-tier dividend of 8 sen per share for the year, to be paid on April 15, bringing its total dividend payment for the year to 34 sen per share.

In a press statement, Bradley Mulroney, president and chief executive officer of Lafarge Malaysia, said the operating environment was challenging in 2014.

“Although contribution from the concrete segment increased, revenue from the cement and aggregate divisions declined due to lower cement prices. At the same time, operating cost increased due to higher electricity tariff, plant maintenance, as well as higher transport cost due to the removal of fuel subsidy,” he said.

Despite the challenging year, the group said it had extended its network of ready-mixed concrete batching plants across Peninsular Malaysia in 2014, and was awarded a five-year contract worth RM254 million for the supply of concrete for the Refinery and Petrochemicals Integrated Development project, and other Petroliam Nasional Bhd-related projects at Pengerang, Johor.

“Moving forward, we see a positively-orientated construction sector, driven mainly by the continued progress of government-led investments and key infrastructure projects, as well as on-going residential and commercial developments,” said Mulroney.

Lafarge Malaysia (fundamental: 2.2; valuation: 0.9) rose 10 sen or 1% to close at RM10.40, bringing it's market capitalisation to RM8.75 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)