Earnings up at CRH on improving US performance

Building materials giant CRH has reported better- than-expected earnings for 2012, and has said that improving performance at its American operations can outweigh pressures being felt in Europe and drive further growth this year.

The Dublin-headquartered cement products specialist yesterday reported earnings before interest, tax, depreciation, and amortisation (EBITDA) of €1.64bn for last year; down by 1% on the previous year’s tally, but up by between 2% and 3% on analyst forecasts.

The figure was also 2.5% higher than CRH’s own previous guidance.

Group sales revenue, for the year, came in below some forecasts, but — at just under €18.7bn — was up 3% on the preceding year.

Operating profit was down by 3%, at €845m and pre-tax profit fell by 5% to €674m. Although down from €711m, in 2011, the pre-tax profit figure still came in at 3% ahead of some analyst forecasts.

Earnings per share suffered a 7% decline, falling from 82.6c to 76.5c, but the annual dividend per share has been maintained at 62.5c.

Net debt was reduced by €500m, to €2.96bn, with management saying the company has one of the strongest balance sheets in the global building materials sector.

CRH’s performance in 2012 was largely driven by its American operations and helped by a strong recovery in residential construction activity and an improvement in the US economy.

Revenue in its Americas distribution, materials, and products divisions rose by 18%, 13%, and 18% respectively.

The Americas materials business saw a slowdown in activity towards the end of the year, however, due to the effects of Hurricane Sandy on the US east coast.

In Europe; the corresponding divisions saw revenue falls of 5%, 10%, and 6% respectively; hampered by harsh weather conditions, weak consumer and investor sentiment, and a weak eurozone economy.

However, a 7% fall in earnings for the Europe materials division was not as bad as forecast, with company guidance having been for a 10% plunge.

“Assuming no major financial or energy market dislocations, we expect that ongoing improvements in our businesses in the Americas, combined with further profit improvement initiatives throughout our operations, will outweigh continuing trading pressures in our European segments, enabling the group to achieve progress in 2013,” said group chief executive, Myles Lee — who also announced, yesterday, that he will be retiring from the company later this year.