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UPDATE 2-LafargeHolcim predicts 2021 construction stimulus boost

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John Revill
·2 min read
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* CEO says company is seeing good momentum in all markets

* Expects benefit from stimulus packages to appear in second half

* Says first-half results will show big improvement year on year (Adds detail, CEO comment, analyst)

By John Revill

ZURICH, Feb 26 (Reuters) - LafargeHolcim expects COVID-19 stimulus packages such as President Joe Biden's Build Back Better programme to boost the construction sector this year, the company said as it reported better than expected fourth-quarter operating profit.

The world's biggest cement-maker on Friday posted a 1.5% increase in like-for-like sales in the three months to Dec. 31 and said it was seeing "positive momentum" at the start of 2021 as projects delayed by the COVID-19 pandemic got under way.

"We are going with very good momentum, we had very positive demand trends in all of our key markets," the Swiss company's chief executive, Jan Jenisch, told reporters.

Jenisch said the improvement was particularly pleasing given the comparison was with a strong fourth quarter of 2019 and that the next six months would benefit from easier comparisons with the coronavirus-hit first half of 2020.

"The numbers will be significantly higher. It will be almost unreal for quarter two," he said.

The CEO also said he expects additional demand to be generated in the second half by packages such as the 2 trillion Swiss francs ($2.21 trillion) expected from India’s National Infrastructure Pipeline plan and U.S. President Biden's $1.9 trillion programme.

Biden's stimulus package, which includes the construction of 1.5 million affordable homes and upgrades to 4 million commercial buildings, made Jenisch optimistic for the future of the company's biggest market.

LafargeHolcim said its quarterly like-for-like recurring operating profit rose 14.1% to 1.037 billion Swiss francs, beating an analyst consensus forecast of 972 million francs.

Sales of 5.99 billion francs beat forecasts for 5.89 billion francs and the company proposed a dividend of 2 francs per share for the 2020 financial year, the same payout as for 2019.

"LafargeHolcim achieved a pleasing improvement in the second half of the year after being severely impacted by COVID-19," said Zuercher Kantonalbank analyst Martin Huesler.

Guidance for 2021 like-for-like operating profit to rise by at least 7% was described by Huesler as a "confident" outlook. ($1 = 0.9055 Swiss francs) (Reporting by John Revill and Riham Alkousaa Editing by Michael Shields and David Goodman)