Tuesday 20 February 2018

Earnings at CRH are on course to break €3bn

Albert Manifold chief executive of CRH which says US growth will be more modest in Q3
Albert Manifold chief executive of CRH which says US growth will be more modest in Q3

IRELAND'S biggest company, CRH, has said that its growth in the US was "more modest" in the third quarter than during the first half of the year, while momentum remained positive in Europe in the latest period.

CRH said that, as previously stated and despite "significant" currency headwinds, overall earnings before interest, tax, depreciation and amortisation (EBITDA) for the year are still estimated to be more than €3bn. That would be more than 35pc ahead of the €2.2bn reported in 2015.

"The expected outturn includes a full-year contribution from 2015 acquisitions and is after taking into account the impact of divestments and one-off items," according to CRH.

CRH said its cumulative sales hit €20.4bn in the first nine months of the year, a 22pc increase on the corresponding period.

On a pro-forma basis, excluding acquisitions, sales were 6pc higher.

The company's shares soared last week after investors bet it could be a big beneficiary from Donald Trump's plans to invest heavily in US infrastructure once he assumes the presidential office.

CRH, which is headed by chief executive Albert Manifold, generates about 60pc of its profits in the United States, and is heavily involved in the supply of materials used for highway and other construction projects.

It is the largest producer of asphalt and the third-largest producer of construction aggregates in the United States.

Last year, the company generated revenue of €23.6bn and a pre-tax profit of €1bn.

In an interim management statement issued yesterday for the three months to the end of September, CRH said its EBITDA rose 9pc in the period, compared to a 20pc rise in the first half of the year.

Davy Stockbrokers said this implies third-quarter EBITDA of about €1.25bn on revenues of just over €7.7bn.

That would represent a margin of 16.2pc, which would be 100 basis points higher than in the third quarter of 2015.

Davy called it an "impressive margin performance".

CRH added that its net debt at the year-end is likely to be about €6bn, compared to €6.6bn at the end of 2015, and that the new figure reflects CRH's "commitment to restore our debt metrics to normalised levels in 2016".

In Europe, CRH said that during the third quarter its pro-forma sales fell 2pc, compared with a 1pc increase in the first-half, "reflecting the mixed economic backdrop in some key markets".

Irish Independent

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