Saint-Gobain: 2008 profit down 9.5%

Compagnie de Saint-Gobain, one of the world“s largest producers of glass for the construction and automobile industries, said 20 February 2009 it would sell around EUR 1.5 billion (USD 1.91 billion) …

Compagnie de Saint-Gobain, one of the world“s largest producers of glass for the construction and automobile industries, said 20 February 2009 it would sell around EUR 1.5 billion (USD 1.91 billion) in new shares to strengthen its capital as the global economic crisis deepened. Saint-Gobain stock plunged on the news and and in mid-morning trading in Paris was down 15.7% at EUR 23.59, its lowest level since October 2008. Saint-Gobain, a company that can trace its origins back to the 17th century and a commission for the Palace of Versailles“ Hall of Mirrors, also abandoned its earnings targets and halved its dividend as it reported falling profit and prepared for “an extremely challenging” 2009. The suburban Paris-based company said recurring net profit fell 9.5% to EUR 2.11 billion (USD 2.66 billion) in 2008 on a 0.9% uptick in sales to EUR 43.4 billion. Businesses related to construction markets in Europe were particularly affected in the 4Q, as the financial crisis worsened and British and Spanish construction markets“ contraction accelerated, Saint-Gobain said. The company cut its dividend to EUR 1 (USD 1.27) from EUR 2.05 a year earlier and said that earnings targets for next year that it had set out in 2007 were “obsolete”. Saint-Gobain made no new forecasts but said it “stands to benefit fully as soon as the impacts of the economic stimulus packages and energy-efficiency plans launched by Western governments begin to be felt”.