HEIDELBERG MATERIALS AG 
ZURICH/PARIS (Reuters) - Weak profit forecasts from Holcim and Lafarge weighed on the newly merged LafargeHolcim (>> Lafargeholcim Ltd), the world's biggest cement maker, highlighting tough conditions that have sparked more consolidation across the sector.
The below-average figures put pressure on LafargeHolcim, which at the time of the merger said it expected to cut costs by 1.5 billion Swiss francs ($1.56 billion) in three years' time, to speed up its efforts to boost profitability. The new company said it would cut spending by at least 200 million francs by the end of the year.
With investment on hold in much of the world due to an uncertain global economic and political outlook, makers of building materials are focussed on cutting costs and boosting efficiency.
German group HeidelbergCement (>> HeidelbergCement AG) agreed on Tuesday to buy control of Italcementi (>> Italcementi SpA) in a deal that values its smaller Italian rival at 6.7 billion euros (4.72 billion pounds).
LafargeHolcim Chief Executive Eric Olsen said the group, the product of a merger of equals which closed this month, continued to operate in a "demanding" global market environment that had affected first-half performance.
"Overall I would say that the environment is certainly less supportive that what people may have thought earlier this year," he told a call with analysts on Wednesday.
A U.S. recovery was well under way, driven by the housing segment, but Europe remained "soft" despite signs of recovery in Britain, Spain and Romania, Olsen said.
Other markets varied wildly, with Indonesia and Brazil slowing, sub-Saharan Africa growing and China seeing sluggish demand.
"We are not in a strong growth environment going forward overall," Olsen said.
Markets seized on the last standalone results from Swiss-based Holcim and France's Lafarge to drive the merged group's shares down more than 6 percent. They were down 4.2 percent at 66.50 francs in Zurich by 1317 GMT, off a session low at 64.80.
Holcim, whose underlying operating profit fell in the second quarter, said it would have expected like-for-like 2015 operating profit adjusted for merger costs to miss by around 10 percent the low end of the 2.7-2.9 billion Swiss franc range.
Lafarge, which said earnings before interest, tax, deprecation and amortisation (EBITDA) fell 2 pct in the quarter like for like, said it would have expected standalone 2015 EBITDA approximately 4 percent below the low end of the initial range of 3.0 billion to 3.2 billion euros.
Kepler Cheuvreux analysts said: "The guidance cuts are rather material to consensus and we expect more weakness today," while adding synergies generated from the merger should help improve results.
Both Holcim and Lafarge expect EBITDA to grow in the second half of the year, officials told the analyst call.
LafargeHolcim said it aims to pay a dividend of at least 1.30 Swiss francs per share this year, while it expected net proceeds of around 6 billion francs by the end of the year from asset sales to bring net debt below 15 billion francs before fair-value adjustments on Lafarge debt and any squeeze-out of Lafarge SA.
UBS said the indicated payout was below its estimate of 1.50 francs and said guidance for net debt was worse than expected.
(Reporting by Michael Shields; editing by Jason Neely and Louise Heavens)
