CRH sees losses hit €70m in first half

CRH has lowered its full-year growth expectations after posting a loss of more than €70m for the first half of 2013.

The Dublin-based concrete and cement products giant blamed a tough trading backdrop in Europe, poor weather conditions, and a continually tough pricing environment for a harsh first-half performance.

CRH recorded a €71m pre-tax loss; a 3% annualised drop in revenue to just over €8bn; a 24% reduction in earnings before interest, taxes, depreciation, and amortisation (EBITDA) to €397m; and a €121m drop in operating profit to €41m.

In its previous trading update in May, CRH said that, assuming normal weather patterns, it expected second-half EBITDA to be ahead of the same period last year, when such earnings amounted to €1.04bn.

However, in yesterday’s interim update, the group said it is now more likely that EBITDA for July to December will be in line with the corresponding period and growth, therefore, would be flat.

“Although recent economic indicators suggest that the eurozone may be emerging from recession, overall construction activity remains weak and we expect challenging trading conditions in Europe, for the remainder of 2013,” chief executive Myles Lee said.

He said management will continue to focus on cost management, operational excellence, value-adding acquisitions, and strong cash generation, adding that the business is “well-positioned to progress as markets recover”.

While the difference between this year’s first-half loss of €71m and last year’s first-half profit of €102m looks stark, the 2012 figure was heavily skewed by one-off beneficial items, including nearly €200m in profit made on disposals during that period.

Yesterday’s figures also show CRH has maintained its interim dividend for shareholders of 18.5c per share. The company’s share price was down by nearly 3%, at €16.30, yesterday.

While CRH’s perform-ance is suffering in Europe, its Americas business is doing well. Products and distribution saw first-half profits and sales rise, while materials usually only makes its mark in the second half — and should still see earnings growth in the latter half of the year.