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News : Irish Last Updated: Jul 8, 2010 - 6:20:49 AM

CRH says sales revenue fell 10% and operating profit dipped 50% in H1 2010 compared with same period in 2009
By Finfacts Team
Jul 7, 2010 - 6:49:33 AM

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CRH, the global building materials group, was formed through a merger in 1970 of two leading Irish public companies, Cement Limited (established in 1936) and Roadstone Limited (1949). CRH accounts for more than one third of market capitalisation on the Irish Stock Exchange and up to 90% of CRH's shares are held outside Ireland. About 2,000 of CRH's payroll of more than 94,000, are located in Ireland.

CRH plc, which is headquartered in Dublin, Ireland and is the second-biggest building materials supplier in the world, and the market leader in the United States, in a trading statement issued this morning for the six months (H1 2010) ended June 30, 2010, reported that sales revenue fell 10% and the group expects EBITDA (Enterprise Value/Earnings Before Interest, Taxes, Depreciation and Amortization or Enterprise Multiple) for the seasonally less profitable first half of 2010 will show a decline of approximately 20% (H1 2009: €0.65bn). Operating profit for the six months to June is expected to be approximately 50% of last year's outcome (H1 2009: €0.24bn). 

Before the start of the trading day, CRH's market capitalisation on the Irish Stock Exchange, was €12.1bn or 30.1% of share issues on the exchange. This compared with  Allied Irish Banks (AIB), Ireland's biggest bank, at €830m or 2.07%.

CRH said first-half profit before tax is expected to be close to breakeven (H1 2009: €0.1bn) after restructuring costs of approximately €30m. The translation impact for the half year is expected to be positive, and at profit before tax level will amount to approximately €10m. the group said since its AGM statement in early May, concerns relating to fiscal deficits across Eurozone countries have intensified, adding to uncertainty regarding the pace of economic progress in Europe.  In the United States, which accounts for roughly half of CRH's EBITDA,  economic growth indicators have to date been more positive than in Europe;  however, recent data releases suggest some softening in the pace of recovery. 

"We continue to expect ongoing improvements in the cumulative rate of like-for-like sales decline through the second half, although the full year decline is now likely to be somewhat greater than previously anticipated.  Nevertheless, with benefits from cost reduction measures, lower restructuring costs (€131m in the second half of 2009) and the favourable translation impact of the weaker euro,  we expect that EBITDA in the seasonally more important second half will be ahead of last year (H2 2009: €1.15b)," the statement says.

In the first half of 2010, the group completed 13 acquisitions at a total cost of €133million across the Materials segments in the US and Europe, and is investing a further €19m in Yatai Cement as CRH's share of equity funding for two development projects in northeastern China. CRH says it remains very well positioned to deliver a healthy transaction flow as trading visibility improves.

In addition to its normal capital expenditure programme, during the first half of 2010 CRH said it has initiated three capital projects involving total expenditure of €84m over a three year period, with the aim of enhancing the efficiency of our cement operations in Poland and India and expanding aggregates capacity in the United States.

Commenting on these developments, Myles Lee, CRH Chief Executive, said: "The 14 acquisition and investment transactions announced today fit very well into our strategy of focussing on value-adding investments in our existing markets. We are seeing a good flow of bolt-on opportunities across our businesses and we continue to monitor wider developments in our industry; however, we are maintaining a patient approach in progressing transactions in light of the challenging market backdrop. CRH is very well positioned to deliver a healthy transaction flow as trading visibility improves. Meanwhile, the disposal process for our Insulation and Climate Control businesses in Europe, which we announced earlier this year, is advancing well". 

Trading statement

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