Pre-tax profits at CRH up 23%
Building materials group CRH said growth in its US offset a slump in European demand as it reported pre-tax profits of €117 million for the six months to the end of June.
The 23 per cent increase in pre-tax profits came on revenues of €8.6 billion, up from some €8.1 billion in the same period last year. EBITDA fell from €574 million in the same period last year to €568 million.
Sales in the US, where CRH is the leading producer of asphalt for highway construction, rose 20 per cent in the period to €4 billion.
“Trading results reflect a positive start to the year for our Americas operations which benefited from favourable early weather conditions and a generally firmer tone in construction markets in the United States,” CRH said in a statement.
This came against a 5 per cent drop in European sales to €4.6 billion, with CRH saying trading had been “adversely impacted” by very severe weather conditions in February and “deteriorating confidence” arising from euro zone economic issues.
EBITDA on the group’s European business fell by 13 per cent to €352 million and CRH said it intended to cut more costs in response to weakness in key markets such as the Benelux region.
"Problems in the euro zone, which have intensified over the past six months, continue to erode consumer and business confidence in the wider European economy," CRH chief executive Myles Lee said.
"Against this backdrop, we expect that EBITDA for the year as a whole will be similar to last year's level."
The group had a total development spend of €256 million on 18 acquisitions and investments, up from €163 million a year earlier.
CRH said business in Ireland remained challenging with construction activity falling sharply. “While we continued to focus on cost reduction, trading was negatively impacted by a seven-week strike in our cement operations and our outturn deteriorated,” it said.
Net debt was €3.9 billion at the end of June, which CRH said was in line with the same point last year.