HOLCIM LTD 
ZURICH (Reuters) - Swiss cement maker Holcim (>> Holcim Ltd) said its merger with Lafarge (>> LAFARGE) was on track to complete in the first half of the year after the company reported a 6 percent rise in fourth-quarter core operating profit, outpacing growth at its French peer.
Holcim said it was still waiting for anti-trust clearance in five of the 20 jurisdictions where it had filed for merger approval, including India, its biggest single market, the United States and Canada.
Asked whether Holcim's strong results versus Lafarge could affect the 1:1 exchange ratio planned to convert Lafarge shares into Holcim shares, Chief Executive Bernard Fontana told Reuters: "There is no automatic adjustment."
Holcim and Lafarge believe the merger will help them cope better with overcapacity and sluggish demand that have dogged the construction industry since the 2008 economic crisis.
Their merger will create the world's biggest cement maker with $44 billion in sales. The two companies are selling assets as part of their merger plan.
"Holcim's results were broadly in line with consensus expectations and once again confirm the better shape of the Swiss company versus its designated merger partner Lafarge, questioning the exchange ratio for the merger," Baader-Helvea analyst Patrick Appenzeller, who rates the stock a "hold", said.
Holcim's fourth-quarter operating profit (EBITDA) rose 6 percent to 1.01 billion Swiss francs (£690 million), helped by faster-than-expected cost-cutting and strong cement sales in North America, slightly above analysts' estimates.
Lafarge last week reported a 4 percent decline in fourth-quarter operating EBITDA (earnings before interest, tax, depreciation and amortisation), mainly due to negative exchange-rate developments.
Holcim said the franc's appreciation against the Indian rupee, the Indonesian rupee, the Canadian dollar and a number of Latin American currencies cost it 1.03 billion francs in net sales and 147 million francs in operating profit in 2014.
It reported a 2 percent increase in fourth-quarter net sales to 4.87 billion francs driven by stronger prices in North America, Europe and Asia-Pacific that outweighed lower volume sales in Europe, Latin America, Africa and the Middle East.
Shares in Holcim rose 1.2 percent to 73.20 francs by 1200 GMT, and were among the top gainers in the blue-chip Swiss SMI index <.SSMI>, which rose 0.4 percent.
Holcim said cement volumes should rise in all regions apart from Europe this year, helping like-for-like operating profit to rise to between 2.7 and 2.9 billion francs, with operating margins rising thanks to higher pricing and ongoing cost cuts.
It will pay a flat dividend of 1.30 francs per share for 2014, below expectations but in line with its policy of distributing one-third of net income attributable to shareholders.
Free cash flow fell 15 percent to 1.76 billion francs in 2014, Holcim said.
(Writing by Georgina Prodhan; Editing by Thomas Atkins and Jane Merriman)
By Oliver Hirt
