Shares in CRH gain despite expected earnings fall this year
SHARES in CRH edged higher this morning in Dublin and London even as the aggregates giant said that earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to fall by about 3pc this year to €1.6bn.
The decline comes as many markets in Europe continue to struggle amid economic difficulties.
But the company also said the damage caused by Hurricane Sandy in the eastern part of the US has also hampered some of its business there and will adversely affect EBITDA in the final quarter of the year but it could benefit from reconstruction in the longer term.
CRH, which is headed by chief executive Myles Lee and is Ireland’s biggest stockmarket-listed company, said its European business saw the pace of sales decline accelerate during the third quarter to 7pc, compared to 5pc in the first half of the year. Reported EBITDA in Europe fell by 13pc in the first half of the year and for the full year CRH expects it to be 15pc lower than the €900m it generated in 2011.
In the United States, CRH has performed better, but there has also been some moderation of sales growth during the third quarter.
“While confidence is returning to the new residential and non-residential markets in the United States, the third quarter saw the rate of growth in like-for-like sales for our Americas Products operations moderate to 4pc,” it said. “This follows like-for-like growth of 9pc in the first half, and again reflects the distorting effects of the very mild start to the year on the timing of activity.”