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CRH shares dip as sales in Europe slip during quarter

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Albert Manifold of CRH. Photo: Shane O’Neill/Fennells

Albert Manifold of CRH. Photo: Shane O’Neill/Fennells

Albert Manifold of CRH. Photo: Shane O’Neill/Fennells

Building materials giant CRH has warned that activity in Europe softened during the third quarter, prompting a decline in its shares despite predicting that its profits will grow this year.

CRH, headed by chief executive Albert Manifold, said that third-quarter group like-for-like sales were 3pc higher, while earnings before interest, tax, depreciation and amortisation (EBITDA), were 6pc higher in the quarter.

All of that earnings growth was accounted for by CRH's operations in the Americas, however. "The trends in EBITDA have been mixed this year, with Europe leading the performance delivery in the first half and the Americas taking the lead in the second half," CRH noted in its results.

But despite a more sluggish environment in Europe, the Americas unit performed well for CRH and the group noted that business there has enjoyed continued positive momentum.

Like-for-like sales in the Americas during the quarter were 6pc ahead of the third quarter in 2013, while overall EBITDA at the unit was 10pc higher in dollar terms, CRH expects that EBITDA in the Americas division for the full year to be about 10pc ahead of 2013, at about €981m.

In Europe, while like-for-like sales rose 7pc in the first half of the year, they fell 3pc in the third quarter.

It forecast that second-half EBITDA will be "somewhat" ahead of last year's figure of €1.08bn. That will make for 10pc growth in full-year EBITDA, to €1.62bn.

CRH said that the detailed analysis of its portfolio is now complete, with its €1.5bn to €2bn divestment programme "well under way". It expects to generate disposal proceeds of about €400m this year.

Irish Independent