CRH reports slightly improved third quarter
By Finfacts Team
Nov 12, 2013 - 10:05 AM

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Sky Tower Wroclaw, Poland - - The Sky Tower, at 212 metres high, one of the tallest skyscrapers in Poland, being built in the centre of Wroclaw, South West Poland. The complex includes apartments, office space and a shopping mall. Bosta Beton, CRH’s readymixed concrete company in Poland, was contracted to supply the 52,000 cubic metres of concrete and pumping services required to complete this project.

CRH plc, the international building materials group, headquartered in Dublin and listed in London, said today in an interim management statement that third quarter group like-for-like sales (lfl) growth was at 2% and quarterly EBITDA (earnings before interest, tax, depreciation and amortization) 3% ahead of 2012 despite adverse currency translation effects.

The group said that assuming normal weather patterns for the remainder of this year, "we anticipate that EBITDA for the last three months of the year will be similar to 2012. Against this backdrop, we reiterate the guidance provided in August of second-half EBITDA in line with last year (restated second-half 2012: €1.04bn).

Robert Eason of Goodbody commented - - "Management has also announced that it will undertake a detailed assessment of the company’s portfolio with a view to identifying and focussing on the businesses which offer the most attractive returns. Management has stated that the process is likely to lead to disposals and will give an update on this on February 25th.

Group lfl sales increased by 2%, which highlights the continued improving trend from -6% in H113. This has been driven by improving lfl trends in both Europe and the Americas. At the EBITDA level, our forecasts look broadly in line with management guidance implying a circa 5% decline yoy for FY13.
In the Americas lfls increased by 4% in Q3 compared to a 1% decline in H113. Management attributes this to continued strength in res and non-res markets and improved weather. On a divisional basis, improvement in the Materials (aggregate volumes +6% in Q3 vs -5% in H113) and Products (lfl growth of 10% in Q3 vs 5% in H113) divisions has resulted in slightly better EBITDA outturns which is offset by a weaker than expected performance in the Distribution division, where EBITDA is expected to be up to 10% ahead for the FY compared to our forecast for over 15% growth.

Europe showed an improving trend with lfls broadly flat in Q313 compared to a 10% decline in H113. The Materials division has reported flat lfl sales for the period, improving strongly on the weather impacted 16% decline in H113. With EBITDA guidance for a 20% decline for the FY implying c.7% upside to our forecasts. Similarly, Products continues to improve with a 1% increase in lfl sales reported vs an 8% decline in H113, with management guiding for slightly better EBITDA performance than our forecasts. The upside to forecasts from these two divisions has been offset by a weaker outturn in Distribution which continue to be impacted by weak consumer sentiment in the Netherlands.

Overall, it is encouraging to see trends improving across both of CRH’s main geographies. However, we believe we have captured this in our forecasts and as such we envisage no material changes to our numbers. We believe the announcement of an asset review is positive and will be welcomed by the market."

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