CRH warns profits to fall 30% to 55% for 2009
In its end of year statement, it said profits would be down by 30% to 55% for 2009.
The forecasts are in line with market expectations but shares in one of the world’s leading builders providers were down more than 3.7% at €18.77 by 2.45pm, a fall of 73 cent on the day at that stage. The stock closed down 3.8% to €18.75.
“Trading conditions remain difficult and the timing of any sustained pick-up in developed world construction demand is unclear,” the company said.
Earnings based on EBITA measure are reported to be down 30% on the previous year at €1.8 billion while profits before tax (PBT) will be off by 55% at€750 million, CRH said.
Profit is stated after once-off charges of €200m associated with cost reduction action taken in 2009 are deducted, the firm said.
The projected profit figures reflect an adverse currency translation impact compared with 2008 of approximately €45m principally attributable to a weaker Polish zloty offset partly by a stronger average US dollar.
Profits on disposals of fixed assets will be less than half last year’s level of €69m while the share of associates’ profit after tax will be about one-third lower than in 2008.
Currency movements knocked €45m off profits for the year.
CRH spent €170m on small acquisitions in the US, Poland and China in the second half of 2009, bringing total spend to €450m for the year.
Despite the sharp share price reversal analysts are positive on the group with leading brokers tipping the stock to outperform the ISEQ and they have given the group a buy recommendation.
Since the cost cutting measures were introduced the group has achieved annual cost savings off its 2007 base of €1.76bn.
Cash flow in the second half of the year was particularly strong with a reduction in net debt from €5.1bn at 30 June to under €4bn at 31 December.
