The weakness of the dollar against the euro could lead to €85 million being shaved off pre-tax profits at CRH this year if current exchange rates persist, the company's shareholders heard yesterday.
Addressing the building materials firm's annual general meeting in Dublin, CRH finance director, Mr Harry Sheridan, said the recent decline in the US currency was "a very substantial matter" for the company.
If prevailing exchange rates are maintained, the company's pre-tax profits, about 60 per cent of which are generated in North America, will lose €85 million after conversion this year, he warned. Mr Sheridan went on to express the board's confidence that the currency issue was a short-term problem that would soon be corrected.
Speaking to journalists after the meeting, CRH chief executive, Mr Liam O'Mahony said this was the "common-sense view" on the matter. "We would have concerns about Europe's inherent competitiveness," he added.
Mr O'Mahony's comments came after CRH chairman, Mr Pat Molloy, delivered a mixed trading statement to the meeting.
He noted that recent weeks had brought "the normal seasonal pick-up in activity" but warned that markets were "likely to remain difficult for the immediate future".
He said CRH would aim to offset this with cost control, efficiency improvements, the recovery of higher input costs and an active development programme.
Mr Molloy went on to robustly defend CRH's record on environmental issues, reiterating the board's assertion that it had no knowledge of possible illegal dumping on company land in Co Wicklow. He said CRH did not have total control of access to the site in question.
One shareholder said this "stretched credulity" and accused the firm of behaving with "spurious contempt" when asked to appear before an Oireachtas committee on the matter.
Mr Molloy suggested that the committee had been used more to generate publicity than to ascertain the facts of the situation.
He said the company was not facing legal proceedings on the dumping issue but acknowledged that it was defending a challenge under competition law from Framus, formerly National Concrete.
The same shareholder went on to describe the pay increases awarded to CRH directors last year as "vulgar and offensive" and said the company was "cloaked in secrecy".
Mr Molloy said the the pay packages had been agreed in order to attract directors of "the very highest calibre".
Another shareholder questioned the independence of the company's non-executive directors, suggesting that just one non-executive could be truly described as independent when links between other directors and major shareholder, Bank of Ireland, were considered.
