CRH announced that it expects that profit before tax for the six months to Jun. 30, 2005 will show a percentage increase in the high teens compared with 2004 (2004: Euro 319m on an IFRS basis). The company’s AGM statement issued on May 4, 2005 indicated that overall trading had been positive in the first four months with a strong start in American operations partly offset by the effects of severe March weather in Northern Europe which hampered activity in a number of its operations.
Through May and June the company’s American operations have continued to perform strongly and, although its European operations have benefited from a return to normal seasonal weather patterns, the overall trading environment for these businesses remains subdued. While markets in Ireland remain very competitive, growth in residential construction and continuing recovery in commercial and industrial construction has resulted in good volume increases and the company’s policy of phased price increases is yielding benefits.
First half activity in the Americas Materials Division has exceeded expectations. A good start to the year in the West and New York/New Jersey operations, combined with an improved performance in the New England and Central operations, has resulted in strong first half heritage advances in aggregates, asphalt and readymixed concrete volumes. Average first half sales prices have also shown good increases and we have entered the seasonally more important second half of the year with solid backlogs at prices well ahead of 2004 levels. With higher volumes and prices the operating result for the first half of the year is expected to show a substantial improvement on the 2004 outcome.
In the US, the economy and overall construction market continue to be strong although, as always, activity levels vary by region. Economies in Europe are generally subdued, with little sign of any imminent acceleration in demand in the larger Eurozone economies. Overall, the company is encouraged by results to date in achieving recovery of higher input costs and look to further progress in this regard in the months ahead.
The company has had a good start to 2005. The recent sharp increase in the price of crude oil is of course unhelpful for world economies and will add to cost challenges in the months ahead. However, with the company’s sustained focus on cost effectiveness and operational performance, it expects to make further progress in the more important second half of the year.