March 2, 2017 / 7:22 AM / 5 months ago

UPDATE 2-LafargeHolcim expects gains from U.S. spending, Mexico border wall

4 Min Read

* Q4 underlying core earnings up 15.5 pct

* Proposes raising dividend to 2 Swiss francs/share

* Sees double-digit core earnings growth in 2017

* Shares up 3.5 pct at 60 Swiss francs at 0930 GMT (Recasts with comments from CEO, share price reaction)

By John Revill

ZURICH, March 2 (Reuters) - LafargeHolcim will gain from massive infrastructure spending in the United States, including the planned border wall with Mexico, the world's largest cement maker said on Thursday as it posted better-than-expected results.

Chief Executive Eric Olsen said the United States was on track to become the Swiss company's most important market, with improving construction boosted by the $1 trillion infrastructure programme announced by President Donald Trump.

"We are very well positioned to serve the infrastructure needs of the U.S.," Olsen told Reuters following the results.

"It is a market where we see some of the highest growth potential in the next couple of years."

He said the United States was well below peak demand for cement, which he expected to recover, "and that is before taking into account a commitment to a trillion-dollar investment in infrastructure projects".

The company had 6 million tonnes of spare capacity to take advantage of the upturn, Olsen said, including a new plant in upstate New York which is due to open in the next few weeks.

As well as working on bridges and airports, the company would also be interested in working on Trump's plans to build a border wall with Mexico, Olsen said.

"We will participate in all critical infrastructure projects in the U.S.," Olsen said. "The wall project ... is an infrastructure project where we would participate."

LafargeHolcim's bullish outlook came as it posted better-than-expected core earnings during its fourth quarter, helping it hit one of its main targets.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 1.61 billion Swiss francs ($1.59 billion) beat the average analyst estimate of 1.52 billion francs in a Reuters poll.

The performance meant it met its target of increasing full-year operating EBITDA by at least a high single-digit rate.

In new targets for 2017, the company said it was targeting double-digit growth in the measure, supported by recoveries in key markets like the United States, Nigeria and India.

The higher targets sent the company's stock higher, with the shares gaining 4.7 percent in early trading.

Separately LafargeHolcim said an internal investigation had revealed a plant in Syria provided funding to armed groups in the war-torn country.

The former Lafarge cement plant had engaged in dealings with certain armed groups and with sanctioned parties during 2013 until it was ultimately evacuated in September 2014.

"It appears from the investigation that the local company provided funds to third parties to work out arrangements with a number of these armed groups, including sanctioned parties, in order to maintain operations and ensure safe passage of employees and supplies to and from the plant," it said.

The investigation could not establish with certainty who the ultimate recipients of the funds were, it said, adding: "In hindsight, the measures required to continue operations at the plant were unacceptable." ($1 = 1.0104 Swiss francs) (Editing by Michael Shields and Alexander Smith)

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