Monday 23 April 2018

CRH poised to deliver first-half profits of around €1bn

CRH CEO Albert Manifold. Photo: Bloomberg
CRH CEO Albert Manifold. Photo: Bloomberg
John Mulligan

John Mulligan

Irish building materials giant CRH is on track to deliver earnings before interest, tax, depreciation and amortisation (EBITDA) of close to €1bn during the first half of this year.

That will be a single, mid-digit proforma increase on the €555m it generated in the first half of 2015.

Since last year, CRH has completed the €6.5bn acquisition of assets from rivals Holcim and Lafarge, which merged, and the $1.3bn purchase of US glazing supplies firm CR Laurence. CRH, which is headed by chief executive Albert Manifold, said that its proforma sales in the first quarter of the year - seasonally quiet for the group - rose 9pc.

"The continued positive economic momentum in the US this year has resulted in improved demand for aggregates and ready-mixed concrete together with positive pricing trends compared with the first quarter of 2015," the company said in an interim statement ahead of its annual general meeting being held in Dublin this morning.

It noted that asphalt volumes were "strongly ahead" in the United States in the first three months of the year, but that prices fell due to the "continued low input cost environment".

CRH pointed out that the first quarter of the year typically accounts for less than 10pc of CRH's annual asphalt sales volumes, and approximately 20pc of aggregates and ready-mixed concrete volumes.

In Europe, CRH said that the stabilising market backdrop and good weather in the first few months of the year contributed to solid demand, albeit with competitive pricing in some regions, resulting in proforma sales in the period being in-line with those reported during the first quarter of 2015.

In its heavyside business in Europe, which includes aggregates, cement, pre-cast concrete, and asphalt pacing products, performance was mixed across its global markets.

In Asia, strong cement demand in the Philippines helped to drive sales up 12pc in the first quarter in the region on a proforma basis.

Davy Stockbrokers noted that CRH's EBITDA forecast for the first half of 2016 is ahead of the broker's own €925m prediction.

"It is difficult to forecast with any degree of accuracy the first half performance at this early stage in the year," Davy noted.

It added: "This is further complicated given the transformed nature of the business following the acquisitions of the LafargeHolcim assets and CR Laurence and the on-going disposal programme."

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