CRH reports 14% fall in pretax profits to €1.6bn

Buildings material giant CRH has reported a 14 per cent fall in pre-tax profits to €1.62 billion and announced plans to raise €1.24 billion for future acquisitions.

Buildings material giant CRH has reported a 14 per cent fall in pre-tax profits to €1.62 billion and announced plans to raise €1.24 billion for future acquisitions.

CRH said its earnings before interest, taxes, depreciation and amortization (EBITDA) of €2.6 billion was 7 per cent lower than 2007.

Revenues over the 12-month period to the end of December were flat at €20.8 billion. Earnings per share fell 11 per cent to 233.1 cent.

The company's operating profit was 12 per cent lower at €1.8 billion.

The company has announced a 1.5 per cent rise in dividend to 69 cent, its 25th-successive year of dividend growth.

The company said it plans to raise €1.24 billion ($1.57 billion) to take advantage of cheaper asset values as a slowdown in construction spreads from the US to Eastern Europe.

CRH said it will sell 152.1 million new shares at €8.40 apiece. Some €500 million of the cash raised will be used to repay borrowings early with the remainder being added to an existing cash pile of €1.5 billion allocated for acquisitions.

The rights offering will be on the basis of two new shares for every seven existing shares held by investors, CRH said.

Business in the first half of 2009 will be "sharply lower" than last year as the most severe winter for many years in Europe and North America exacerbates the impact of weak markets, the company said in a statement.

CRH chief executive Myles Lee said the outlook for 2009 is extremely challenging. He said the stimulus package in the US should see approximately $30 billion come on stream from the middle of the year for spending on roads and bridges.

He said severe weather conditions in January and February would exacerbate the impact of weak markets on the first half of the year.

CRH said construction demand in Ireland fell sharply with the decline in the residential sector accelerating during 2008. Against this the infrastructure and agricultural sectors continued to see strong demand.

It said further falls in activity levels in Ireland and Spain this year are expected to impact its European materials business.

The company spent €1 billion on acquisitions last year including a 50 per stake in Indian cement manufacturer My Home Industries and a 35 per cent stake in French builders merchants Trialis.