CRH warns of full-year decline
Published: 07 January, 2010
DUBLIN: Building materials group CRH expects full-year earnings to fall by 55% as demand from the construction industry in Europe and America continued to fall in the second half of last year.
CRH estimates that earnings before interest, tax, depreciation and amortisation for 2009 will fall from €2.67bn to €1.8bn, (£1.64bn) with pre-tax profit slipping from €1.63bn to €750m.
In the last six months of the year, like-for-like sales at CRH fell 18%, a modest improvement on the first half of the year, when sales dropped 21%.
Net debt reduced from €5.1bn at the end of June to less than €4bn, and the group made €168m of new acquisitions and investments in the period.
CRH's European businesses, which make up 54% of revenue, saw continued weakness in demand for cement and aggregates in Spain, Finland and Ireland in the second half.
The decline was more muted at CRH's portfolio of DIY stores. These include Karwei in the Netherlands and Hagebau in Germany, although sales were still down 10% in the second half.
Sales of building products such as insulation accessories and masonry supplies declined at roughly the same rate as the first half of the year, when turnover fell 19%, although the building products business was boosted by a pick-up in demand for bricks in the UK as building merchants started restoring inventory.
The company anticipates a 40% fall in full-year earnings before interest, tax, depreciation and amortisation from its European businesses compared with the €1.46bn reported in 2008.