CRH's first-half driven by the Americas

CRH's first-half driven by the Americas
Published: 27 August 2015

CRH's first half turnover advanced by 12.6 per cent to €9,370m and the EBITDA improved by 9.9 per cent to €555m. The trading profit increased by 11.2 per cent to €189m and after a net interest charge 8.6 per cent higher at €139m, the pre-tax profit increased by 3.3 per cent to €63m.

The net attributable result improved by €1m to €46m. Net debt at the end of June was 67.3 per cent lower at €1212m, giving a gearing level of 9.7 per cent, which compares with 39.9 per cent a year earlier.

European heavy building materials
The European heavy building materials operations saw turnover decline by 6.6 per cent to €1,760m and the EBITDA came off by 21.9 per cent to €125m, while the trading profit fell by 37 per cent to €38m.

Group cement deliveries increased by 37 per cent in the UK and by 23 per cent in Ireland and were one per cent higher in Poland, but declined Belgium, Ukraine, Finland and Switzerland, in each of the two last countries by 10 per cent. Prices improved in the Ukraine, Great Britain and Finland, but declined in Poland, Switzerland and Ireland. Aggregates and concrete volumes improved in The Netherlands, Spain, Ireland and Poland, 

Turnover in building products improved by 2.6 per cent to €475m and the EBITDA improved by some five per cent to €46m and the trading profit was €1m ahead at €33m. Concrete broducts, which were included last year, has now been transferred to the heavy building materials segment. The European distribution turnover improved by 4.6 per cent to €2010m but the EBITDA fell by 37 per cent to €54m and the trading profit fell by 65 per cent to €16m. The builder's merchants operations are spread across 343 branches in six countries while the DIY business operates 184 stores in The Netherlands, Germany and Belgium.

North American heavy building materials
The North American heavy building materials turnover was notably boosted by a stronger US dollar and increased by 30.5 per cent to €2,235m, but in dollar terms the improvement was a more modest 7.3 per cent. The EBITDA rose by 79.4 per cent to €113m and the seasonal trading loss was reduced from €61m to €34m.

Aggregates deliveries were six per cent higher (+3 per cent excluding acquisitions) and there was an underlying two per cent improvement in prices. Asphalt volumes were six per cent ahead and profitability improved, thanks to lower input costs, though prices were two per cent lower. Ready-mixed concrete shipments were three per cent lower, but the underlying price was 4 per cent higher. Paving and construction services pricing was under pressure in a very competitive environment.

The building products turnover rose by 20.8 per cent to €1,903m and the EBITA advanced by 36.6 per cent to €179m and the trading profit was ahead by 40.0 per cent to €112m. Underlying turnover improved by 8 per cent in architectural products and by 7 per cent in pre-cast products. The distribution turnover advanced by 29.7 per cent to €987m and the EBITDA improved by 35.7 per cent to €38m and the trading profit grew by around 41 per cent to €24m.

CR Laurence acquisition
The company also announced today the US$1.3bn acquisition of CR Laurence in the US, a supplier of high-value custom hardware to the glass and glazing industry. Bernstein commented that this marks yet another big acquisition made by CRH, which is clearly not a bolt-on.

Post the Holcim/Lafarge and the CR Laurence deals the pro-forma net debt would be around €8600m. Capital expenditure in the period was 58.7 per cent higher at €338m while spending on acquisitions declined by 37.7 per cent to €74m.

Management is guiding for 2H EBITDA to show ‘good progress’ versus last year with Europe broadly in line with last year on a like-for-like basis and Americas ahead of last year despite the tough comparisons.