CRH Tuesday announced an interim pretax profit of EUR606m for the six months to June 30, compared to EUR670m for the same period last year.
Following 15 years of consecutive growth and a record performance in 2007, more difficult trading conditions and a weaker US$ will, as previously indicated, result in a lower outcome for 2008.
The percentage decline in full year profit before tax is expected to be broadly similar to that reported for the first six months, with a lesser reduction in earnings per share due to the ongoing share buyback and an expected lower percentage tax charge.
Against this background, CRH’s geographic, sectoral and product balance, combined with significant cost and commercial initiatives, underpins performance and cash flow.
Since its Interim Trading Statement of 2nd July, the company has seen some easing in commodity prices and a strengthening of the U.S. dollar. However, the negative newsflow surrounding economic developments and financial markets has continued and, together with recent international political developments, has added to market risks and uncertainties for the second half of the year.
Europe Materials has had a positive first half with continuing advances in eastern Europe, together with recovery in Portugal, more than compensating for declines in Ireland and Spain. These broad trends are expected to continue through the remainder of the year and, with the contribution from its Indian joint venture included for the full second half, the company currently expects operating profit for this division to show a mid-teen percentage increase on the 2007 outturn of EUR586 million.
In Europe Products, it expects that the slower trends evident through the second quarter will continue and likely intensify through the second half of the year. While the resultant organic declines will be offset somewhat by more significant second-half acquisition contributions, it currently anticipate that full-year operating profit is likely to show a mid-teen percentage decline on the 2007 outturn of EUR308m.
Overall for Europe, its current expectation, based on recent trading trends and including contributions from acquisitions, is that full-year operating profit will show a low-single-digit percentage increase on the 2007 outturn of EUR1.106bn.
Americas Materials continues to achieve the further strong price increases necessary to recover higher input costs. However, these price increases are having an increasingly adverse impact on volumes against the backdrop of modestly higher highway budgets. Assuming normal seasonal weather patterns from now until year-end, CRH believes that this Division is likely to report a low-teen percentage decline on the 2007 operating profit outcome of US$781m.