CRH says first-half profits to match 2009 but sales decline

BUILDING MATERIALS giant CRH expects profits for the first half of the year to stay in line with the €108 million it earned during the same period in 2009, but said yesterday that sales were continuing to decline.

The Irish group also announced that it made a series of acquisitions worth a total of €186 million in the first six months of the year, including an investment of €50 million in one major expansion.

Most of the cash was spent in the US, but the group also increased its foothold in China and India, markets it entered within the last three years, and continued its growth in Europe.

CRH said full-year sales would be hit harder than anticipated by concerns about euro zone countries’ deficits and a slowdown in the pace of recovery in the US.

The group expects a fall of 20 per cent in its earnings before interest, tax and write-offs, which were €650 million in the first half of 2009.

CRH said revenue was recovering after harsh winter weather but euro zone problems had intensified and US economic indicators had weakened since its last update in May.

“We continue to expect ongoing improvements in the 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,” the group’s interim management statement said.

Operating profits for the first six months of the year will be about half last year’s €240 million, but profits before tax, which were €108 million, will be in line with last year.

In the US, the group spent €112 million on nine acquisitions and began the development of a €50 million quarry in Georgia.

The acquisitions are mainly in its materials division and will add $159 million a year to the group’s sales.

CRH has committed €19 million towards expansion at Yatai Cement, the Chinese cement manufacturer in which the Irish group has a 26 per cent stake.

In India, its concrete joint venture My Home Industries bought a firm in Hyderabad that will add €3 million a year to CRH’s sales.

The Dublin-based group, which has up to €1.5 billion to spend on acquisitions following a rights issue, said it would remain patient in chasing bigger deals in light of the challenging market.