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Saint-Gobain: chairman confident on 1999 outlook

29 July 1999: Chairman Jean-Louis Beffa of the French group Saint-Gobain said he was confident of hitting at least a 15% increase in earnings per share for 1999, helped by rising prices and a healthy …

29 July 1999: Chairman Jean-Louis Beffa of the French group Saint-Gobain said he was confident of hitting at least a 15% increase in earnings per share for 1999, helped by rising prices and a healthy world economy. “In the first half, we saw, on the whole a slight increase in prices – 0.7% with a slight drop in Europe and a slightly bigger increase in America for our products,” he said. “I see a trend just as favourable in the second half,” he added. The positive price trend would be supported by economic growth in Europe and the United States, he said. “Europe is improving, Asia has definitely touched bottom, the United States is holding up well, so we are clearly in a good position in the second quarter and this situation can only be good for prices.” Beffa said he was confident the group, which specializes in glass products, would boost 1999 earnings per share by at least 15%, excluding exceptional elements. “I say at least 15% because I think we could do better.” Of the 15% earnings growth, 10% would come from recurring business and 5% from an announced buy-back and cancellation of its shares. “There are particularly good prospects in Europe. It“s very clear to us, especially in France, that since mid-May there has been strong demand for building products. This marks a new climate of confidence in France. “I think the government is right, we have come out of a hiatus since mid-May and France will have a good second half.” Saint-Gobain does not expect significant capital gains in the 1999 second half and will complete the sale of its stake in the Vivendi conglomerate, worth Euros 1.8 billion, in 2000 and 2001. Saint-Gobain had earlier announced first half net attributable profit of Euros 882 million, up 67.7% from a year ago, on sales of Euros 10.96 billion. Stripping out capital gains made from unwinding some of its cross-shareholding in Vivendi, net profit was Euros 468 million. Brokerage ING had been looking for net profit, excluding capital gains, of some Euros 430 million and set a share price target of Euros 190.

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