CRH expects to increase pre-tax profit by over 23% in 2006
CRH has put in another strong performance in the year just ended, the pre-tax profit rising by some 23.5% to approximately EUR1580m. During 2006, CRH spent a net EUR2,100m on acquisitions, including €860m for the retained parts of Ashland Paving & Construction.
Poland was a particularly strong market, with the group’s cement shipments increasing by in excess of 20%, while, though less dramatic, good volume increases were seen in Ireland, Finland and the Ukraine. On the other hand, Swiss cement deliveries were down by some 10% following the completion of the Loetschberg tunnel and domestic cement shipments by the Portuguese joint venture declined but export sales were strong. The Spanish concrete operations had another strong year and the 26.3% stake in Uniland was been treated as an associate in the second half, though the ownership dispute regarding the holding has yet to be finally settled and Valderrivas is in control of the business. The European construction products operations had a good year with improved volumes and margins in concrete, while in clay, the lower British brick volumes were offset by better results from the Dutch and Polish operations. The distribution activities also benefited from the increased housebuilding activity, though the DIY side was growing more slowly. Second half acquisitions across Europe amounted to EUR47m in heavy building materials, EUR121m in building products and EUR18m in distribution. These included Secil buying the remaining 50% of the Ecorresiduos slag business in Portugal as well as its first acquisition in Italy, that of a concrete landscaping business in Lombardy and Piemont.
In North America, underlying volumes were down by between 3% and 4% in aggregates and asphalt and by some two per cent in ready-mixed concrete as the second half drop in housebuilding activity made itself felt, but overall volumes were well ahead thanks to the benefit from acquisitions. Building products, however, continued to advance in the second half thanks to the strong non-residential performance. The distribution operations were ahead over the year, but demand did decline in the final months. The EUR39m purchase of a 50% stale in American Cement Company, in August, will require further investment prior to the plant’s completion, which is expected towards the end of 2008. In the second half of 2006, CRH spent a further EUR69m acquiring additional heavy building materials businesses in North America, EUR53m on building products and EUR92m in distribution.
Published under Cement News
