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LafargeHolcim is on track to exceed its disposal target this year despite falling cement volumes and sales in most regions where it operates.

The Zurich-headquartered cement company, created from a €41bn merger last year, has been struggling to cut costs and reduce debt amid a global cement oversupply and falling demand. Net like-for-like sales in the second quarter fell 2 per cent compared with the year before.

Eric Olsen, the Swiss-French company’s chief executive, said focusing on pricing and cost-cutting was “delivering visible earnings momentum”, and he blamed problems in Nigeria, where plants were affected by gas shortages, for the muted performance. Without this, he said, adjusted operating earnings before interest, tax, depreciation and amortisation would have risen 13 per cent, rather than 6 per cent.

“Nigeria is a high-growth market and we are adapting our plants to reduce our dependency on gas to restore supply and capture growth,” he said.

Mr Olsen took over at LafargeHolcim in the wake of last year’s controversial merger of France’s Lafarge and Switzerland’s Holcim, which was dogged by internal power struggles and resulted in several changes of personnel at the top. Since the deal, its chairman Wolfgang Reitzle has been replaced by Beat Hess, a veteran Swiss corporate lawyer.

Shareholder scepticism about the benefits of the tie-up have weighed on the company’s share price. It was above SFr75 ($77) when the deal closed in July last year and has fallen by more than a third since. On Friday the shares rose almost 5 per cent to SFr47.96.

Since the economic slowdown that followed the financial crisis, the cement industry has been suffering from a global supply glut, which has put pressure on prices. In the second quarter cement volumes fell 3 per cent year on year on a like-for-like basis and LafargeHolcim said it expected demand to be sluggish, at between 1 to 3 per cent in 2016.

In response, Mr Olsen, who believes LafargeHolcim over-invested in the past, is shifting the group’s business model towards lower capital spending and stronger cash flow generation.

LafargeHolcim had promised SFr3.5bn of disposals in 2016. On Friday it said it would exceed that target in 2016 and increased it to SFr5bn by the end of 2017. The company has sold operations in fast-growing countries such as India, Sri Lanka, China and Vietnam to meet the goal.

“These transactions, all secured at good conditions, also help us to streamline and simplify our operations, and allow us to maximise synergies,” said Mr Olsen.

Despite the divestments, some of which have yet to close, net financial debt in June was unchanged on March at SFr18.1bn. There was a small improvement in its maturity and average cost, and LafargeHolcim said it expected debt to fall to SFr13bn by March 2017. The company had delivered SFr404m of the projected SFr1.1bn of savings from last year’s merger, it said.

Second-quarter profits, measured by operating ebitda, rose 10.5 per cent year on year — despite cash flow from operating activities falling by a fifth. In the first half of the financial year, operating ebitda was flat on the year before although in the second quarter it was up 6 per cent on a like-for-like basis to SFr1.7bn.