CRH cuts North American seasonal losses
CRH’s first half turnover rose by 12.9% to EUR6,329.3m, with the EBITDA advancing by 14.3% to EUR708.2m and the trading profit (EBIT) moving ahead by 20.2% to EUR444.8m. Capital expenditure in the period rose by 31.9% to EUR347m, chiefly because of higher development expenditure, while spending on acquisitions was a modest EUR207m, compared with EUR802m in the first half of last year, which included buying the 49% stake in Secil. Net debt at the end of June stood at EUR3,268m to give a gearing level of 60% compared with 73% a year earlier.
In heavy building materials Europe, turnover advanced by 19.0% to €1,215.7m, helped by a full period’s contribution from Secil, and the trading profit was 12.2% higher at EUR141.3m. Volumes were affected by bad weather in the first quarter in many of the Continental operations, though good volume growth was seen in Ireland and Spain. Swiss cement volumes were up thanks to a major tunnelling contract, but Polish cement deliveries were off by 17% on an exceptionally strong first five months last year. Finnish and Ukrainian cement shipments were steady aver the period and the Ukrainian plant is being converted from gas firing only to burn coal/pet coke/waste as well. Cement capacity increases are being planned for both Switzerland and the Ukraine.
Building products Europe saw turnover improve by 9.1% to EUR1188.9m but the trading profit declined by 10.5% to EUR85.9m, primarily because of the inability to pass on higher energy costs in the insulation business and weaker demand for concrete products in Germany, The Netherlands and Britain. Lower clay volumes in Britain were more than compensated for by higher prices. The European distribution business produced a 13.5% increase in turnover to EUR1016.0m with the EBIT emerging 2.5% higher at EUR49.6m, with the weakening in margins being down to poor March weather and weak Dutch consumer spending.
The American heavy building materials arm had a much better than expected first half, with turnover increasing by 12.5% to EUR1,065.3m and the seasonal first half loss being substantially reduced from EUR31.5m to just €4.1m. Underlying aggregates deliveries were some 7% higher and ready-mixed concrete deliveries were ahead by around 3%. The improvement was seen across all states where there is a major presence, with the exception of Michigan and Connecticut, where road spending has been weak.
American building products had the benefit from the continued strength of the US housebuilding market and some recovery in non-residential building, leading to a10.7% increase in turnover and a 26.4% advance in trading profit. Concrete products and brick volumes were ahead, particularly in the south and, for concrete, also in the west. Prices rose more than costs, except in the still small South American operations. The US distribution activities contributed a 13.4% increase in turnover to EUR506.3m and the profit jumped by 58.3% to EUR28.5m, with Florida and the west being particularly strong, while the Midwest did not share in the volume increases seen elsewhere.
