Concrete and cement group CRH expects to return to growth this year, with management suggesting 2013 was the turning point in the group’s profit cycle.
The upbeat outlook, communicated on the back of a harsh set of annual results, was well-received by investors, with CRH’s share price jumping by over 7% in Dublin and by more than 6% in London.
The Dublin-based international building materials giant yesterday reported a pre-tax loss of €215m for 2013, down from a profit of €646m the previous year.
Operating profit fell by €700m to €100m, a fall reflecting a 6% decline in EBITDA and a non-cash impairment charge of €650m relating to its ongoing portfolio review.
A loss per share of 40.6c was also recorded, while sales revenue was flat at just over €18bn, although down by 2% on a like-for-like basis.
On an operational basis, like-for-like sales in the Americas (albeit the products division doing significantly better than the materials unit) were up by 2%, with EBITDA (in US dollar terms) ahead by 10%. In Europe, like-for-like sales were down by 5%, last year, with earnings down 19%.
However, CRH was hit hard by tough weather conditions in the first half of 2013 and saw a marked improvement in the second half.
Signs of stabilisation in Europe and improvements in economic and construction trends in the US led management to deliver an upbeat outlook for 2014.
“We believe that 2013 represents the trough in our profits, and that 2014 will be a year of profit growth. We are encouraged by second-half activity levels in 2013 and by the fact that, while it is still early in the season, trading so far in 2014 has been ahead of last year,” group chief executive, Albert Manifold said.
Year-end net debt beat guidance, coming in at €2.97bn, while total dividend for the year remained unchanged at 62.5c.
While the group spent more than €700m on acquisitions and investments during 2013, a marked lack of asset sales saw profits made on disposals fall from over €200m to just €26m.
While it has a plan to sell somewhere north of 10% of its asset portfolio in the coming years, CRH said yesterday that around 70% of its current asset base remains of core interest.
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