CRH shares see fall over 23.5% drop in turnover

BUILDING materials group CRH had a 23.5% drop in turnover in the first two months of this year, it said in a trading update yesterday.

Following the announcement, ahead of the group’s AGM in Dún Laoghaire, Co Dublin, shares in CRH were down over 3% at one point. By the close they were trading at €19.51, down 2.61% or 52 cent.

The group blamed exceptionally harsh winter weather experienced during those months. It said more normal seasonal weather in March and April, as well as a rebound from very depressed levels of activity in the first two months, resulted in a sales decline of 14% for the first four months of 2010.

Earnings before interest and tax in the more important second half of the year should be ahead of the 2009 figure of €1.15 billion, it said.

Speaking after the AGM, chief executive Myles Lee said it was too early to say if earnings in 2010 will be ahead of 2009 overall.

Mr Lee added the group was still looking for “bolt-on” acquisitions in parts of its operations in Europe and the US.

In Ireland, cement output has shrunk 60% between 2007 and 2009. Demand could fall by “20% plus” this year in what has been a “very significant shake out in the market. It will come back but it will be a number of years”.

Due to the downturn jobs will be lost in Ireland. “We are in negotiations with the unions about that,” Mr Lee added.

The meeting was dominated by protesters both inside and outside the meeting representing the Ireland Palestine Solidarity Campaign.

They accused the group of profiting from the wall still under construction that cuts off nearly 50% of Palestine’s West Bank.

A leaflet distributed by the protesters before the meeting said CRH was engaging in illegal activities in “occupied Palestinian territory”.

That claim was made to the meeting also and was strenuously denied by the chairman of CRH group, Kieran McGowan.

The nub of the accusation is the 25% stake bought by CRH in Mashav, an Israeli holding company in 2001. It controls Nesher Cement which makes 85% of the product sold in Israel.

It is being used to build the 450km long wall that has cut the Palestinian West Bank in half. Brian Cassidy said he had seen the wall in person and told the CRH board: “I felt a terrible sense of shame.”

David Landy, another shareholder, accused the group of “war crimes”.

Mr McGowan pointed out that CRH sells cement to all comers in the region, adding that The Palestinian Community Services Company “chooses to be a customer of Nesher”.

That defence was also offered by Mr Lee to journalists after the meeting.

“We sell to all customers and the Palestinian Authority is a significant customer, they don’t have a problem of sourcing supply from Nesher and Mashav,” Mr Lee said.

He declined to comment when asked if the company would not be better off selling the business given the level of protest it encountered yesterday.