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News : Irish Last Updated: Jul 8, 2009 - 8:13:03 AM

CRH says profit plunged in first half of 2009; Outlook - - trading conditions to remain extremely challenging but profit performance will improve
By Finfacts Team
Jul 7, 2009 - 6:53:22 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 about one third of market capitalisation on the Irish Stock Exchange and more than 80% 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, the Dublin-headquartered international building materials group, says in a trading statement issued this morning, that while the rate of profit decline in the second quarter eased substantially compared with the first three months of 2009, the global recessionary environment led to weaker than anticipated trading in May and June. Against this backdrop CRH expects that EBITDA (earnings before interest, tax, depreciation and amortisation) for the seasonally less profitable first half of the year will show a decline of approximately 40% (H1 2008: €1.1 billion). Profit before tax is expected to be of the order of €0.1 billion after restructuring costs of approximately €75 million and an adverse translation impact at profit before tax level of approximately €20 million. This compares with a first-half 2008 profit before tax outturn of €0.6 billion. The outlook is for trading conditions to remain extremely challenging but profit performance will improve.

CRH said while overall trading conditions are expected to remain extremely challenging, there are a number of positives which should impact to a greater extent in the seasonally more profitable second half. These include further benefits from the aggressive cost reduction measures undertaken in 2008 and first-half 2009, more moderate second-half energy related input costs than in 2008 and improving infrastructure spend in the United States and some European markets. Accordingly, although second-half profitability will be lower than in 2008, the rate of decline is expected to improve compared with the first half.

CRH said operating profit for the six months to June is expected to be approximately a third of last year’s outcome (H1 2008: €0.7 billion), reflecting a higher decline than at EBITDA level due to the fact that depreciation and amortisation charges are more equally balanced than EBITDA between the first and second halves.

In Europe, the trading environment to date has proved much more challenging than the first half of 2008 which benefited from good demand and a mild winter.

In the Americas, CRH said financing constraints have led to delays and cancellations in commercial construction projects resulting in a sharper than expected slowing in the pace of US private non-residential construction. In addition, the eastern United States experienced higher than average rainfall in June which hampered the start-up of the highway construction season in this region.

Acquisitions and investments totalled approximately €0.3 billion in the first half of 2009.

CRH accounts for about one-third of the capitalisation of the Irish stock exchange.

Trading statement.

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