Profits at CRH down 82%

Profits at building materials specialist CRH declined 82 per cent from €606 million to €108 million during the first half of 2009, the group said today.

Revenue for the group fell 15 per cent to €8.29 billion, down from €9.70 billion a year earlier.

Operating profit at the Irish Stock Exchange's biggest performer was down 66 per cent from €712 million in the first six months of 2008 to €241 million.

Pre-tax profits amounted to €108 million due to restructuring costs of €74 million and a €21 million hit from currency movements.

Core profits on an Ebitda basis fell by 41pc to €651 million.

During the six-month period CRH spent €300 million on acquisitions and investments.

Profits at the company's European materials division were down 70 per cent to €80 million with profits in Ireland declinging by €60m compared to the same period a year earlier. Profits in the Americas Materials division declined €2 million

CRH said it has maintained its interim dividend at 18.5 cent.

Chief executive Myles Lee said the decline in profits should ease in the group's traditionally more profitable second half.

In a statement issued this morning, CRH said the rate of decline in the second quarter had eased substantially compared with the first quarter.

"While overall profitability in the second half of 2009 will be lower than in 2008, we will benefit from the aggressive cost reduction measures undertaken in 2008 and to date in 2009 and from more moderate second-half energy-related input costs than in 2008," said Mr Lee.

"As a result, the overall rate of profit decline experienced in the first half is expected to improve in the seasonally more profitable second half," he added.

Davy analysts said that CRH's strong cash performance was the highlight of the half-year results, which were broadly in-line with a trading update issued in early July.

Meanwhile NCB Research analysts said they expect no change to their forecast of 107 cent of EPS this year, with earnings likely to pick up in 2010 as a result of the cost reduction and the US stimulus package contributing to earnings.

"We continue to believe that 2009 will represent the earnings trough in the current cycle for CRH, with a partial recovery in earnings in 2010 on the back of flat revenues and much reduced operating costs. We remain positive on the stock," it said.