Saint-Gobain posts record operating income, confident can offset inflation

The Saint-Gobain logo is seen on the company headquarters building at the La Defense business district in Courbevoie, outside Paris, France, February 19, 2018. REUTERS/Gonzalo Fuentes

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July 27(Reuters) – French construction materials group Saint-Gobain (SGOB.PA) on Wednesday posted record half-year operating income and confirmed guidance for the year, despite the pandemic, supply chain disruptions and inflation, the firm said.

Its operating income hit a new record in the half-year, reaching 2.80 billion euros, up 13% on last year at constant exchange rates.

“Over the coming quarters, we are ready to adapt as needed to the consequences of rising interest rates and inflation along with the geopolitical and energy situation in Europe,” Chief Executive Benoit Bazin said.

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Saint-Gobain now expects its energy and raw material costs to increase by almost 3 billion euros in 2022 compared to 2021, against a previous estimate of 2.5 billion.

Although spikes in raw material prices have raised costs for the construction industry, Saint-Gobain again confirmed its ability to offset inflation through price increases.

The company, which designs, manufactures and distributes materials for the building and industrial market, in June confirmed its outlook of “further increase” in operating income this year, after it reached a record in 2021.

Its half-year sales amounted to 25.5 billion euros ($25.77 billion), beating the figure of about 25.2 billion euros forecast by analysts in a company-provided consensus.

($1 = 0.9897 euros)

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Reporting by Alizée Degorce and Olivier Sorgho; Editing by Jan Harvey and David Evans

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