CRH sees a 3% revenue increase in 3Q17

CRH sees a 3% revenue increase in 3Q17
21 November 2017



CRH has reported a three per cent increase in revenue for the third quarter of 2017. The group's EBITDA has also risen two per cent YoY for the 3Q. The company’s trading performance has particularly benefitted from underlying growth in the Americas throughout the period. Elsewhere, the 3Q results from Europe have remained positively consistent with the rest of the year while performance in Asia has deteriorated.

CRH has announced for the nine months of 2017 ended September, a two per cent YoY climb in revenue to EUR20.7bn (US$24.27bn). Similarly, EBITDA has seen a two per cent rise for 9M17 to EUR2.43bn from EUR2.38bn of the year-ago period.

Outlook for the year

If the positive momentum continues, the company expects EBITDA in excess of EUR3.2bn by the close of 2017. Full-year depreciation and amortisation expense is likely to be in line with the EUR1.1bn seen in 2016.

So far in 2017, CRH has spent EUR1.34bn on 27 acquisition and investment opportunities. Following the sales growth in the two regions, CRH has chosen to develop projects located in Europe and the Americas. Therefore, the group has allocated EUR690m to the purchase of 18 acquisitions and one investment in the Americas. The remaining EUR650m has been spent on five acquisitions and one investment in Europe.

CRH has pending transactions in the Americas to complete by early 2018. Negotiations have commenced to sell its Americas Distribution business and acquire Ash Grove Cement Company. CRH is also looking to acquire assets currently owned by Votorantim Cimentos North America Inc and Anderson Columbia Co.

Europe

CRH's revenue in Europe grew by two per cent YoY for the 9M17 period. Likewise, EBITDA reached a three per cent higher total for the first nine months of 2017 than for the corresponding period in 2016. The steady growth in Europe means that EBITDA generated from this region is expected to increase by four per cent YoY (2016: EUR1.1bn) for the full-year period. In Poland the sales of cement volumes have increased and pricing continues to be competitive.

Americas

The growth in sales in the Americas has been attributed to a build-up of demand after poor weather earlier in the year. The revenue for the first nine months of 2017 reached a two per cent increase when compared with the previous year. EBITDA saw a four per cent increase YoY in 9M17 and is expected to improve five per cent YoY in 2017 (2016: EUR1.9bn).

Asia

Despite the volume of cement sold in the Philippines being consistent with 2016, highly-competitive pricing had a negative impact on revenue. CRH's revenue for the region fell nine per cent YoY for 9M17. EBITDA for the Asia segment dropped 45 per cent YoY for 9M17 due to competitive pricing and the high cost of expenses. The region's negative trend is expected to continue for the remainder of the year.

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