CRH issues profit warning for first half of the year
Group chief executive Myles Lee said after the group’s annual general meting in Dublin yesterday the group has shed about 15% of its 90,0000 staff globally due to the severity of the downturn in its core markets.
Shares in the group suffered one of their biggest one day falls in recent months and lost 7.2% of their value to close at €18.40 in Dublin.
Mr Lee said in comments to journalists after the agm that there will be no significant upturn in the Irish cement market until well into 2010.
CRH said in its trading update, issued before the agm, the seasonal pick up in the second quarter had “not been as strong as expected”, and for that reason its earnings would be lower than its earlier guidance to the markets.
The group said its materials operations in Poland and Finland were most impacted by the harsh winter with year-to-date cement volumes down by over one-third in both markets.
Recent weeks have seen improved trading conditions in Poland as major infrastructure projects get underway.
Weather also had an impact in Ireland and the Ukraine.
Economic contraction has been the main contributor to a fall of approximately 50% in cement volumes in both countries, the group said.
Shareholders raised a number of questions including the reasons for the its €1.2 billion right issues and its plans for development in China and India.
Chairman Kieran McGowan said the fund raising was not “in anyway shape or form motivated” by funding concerns.
And he stressed the group’s future wold stay focused on core markets.
The group will “continue to monitor progress” in those peripheral markets, but “our main focus will be on markets that have delivered so well for us in the past”, he said.
Mr McGowan also rejected out of hand suggestions from shareholder Seamus Maye that the group has left itself exposed to massive fines down the line if it is sued for anti-competitive practices in its key markets.
Since he raised that and other matters two years ago “not one non-executive director contacted me to satisfy him/herself in relation to these allegations despite the fact that CRH’s share value could be all but wiped out over the next few years as successful anti-trust actions begin to bite”, he said.
He alleged the group had serious exposure to competition law breaches in Ireland, citing the case of the Whelan Group in Ennis which he alleged CRH took “quasi control” of in 1998.
In response the chairman rejected all allegations made by Mr Maye.
“I totally refute the allegations and disagree with what you said,” the chairman said.
