Materials giant forecasts 25% jump in earnings
The Dublin-based international concrete and cement producer is not due to report interim figures — for the first six months of this year — until mid-August, but said yesterday, via a trading update to coincide with its annual shareholders’ meeting, that it expects group Ebitda (earnings before interest, tax, depreciation and amortisation) to come in at around €500m for the first half of 2014; up from €400m for the corresponding period last year.
A large part of that forecast relies on an anticipated recovery in its North American operations — where trading is expected to improve over the course of this month and next — and more normal weather patterns in all of its core geographical markets.
In Europe, CRH said the improved trading trend it saw during the second half of last year has continued into 2014, with the lack of a harsh winter and improved economic conditions aiding construction activity in most markets across the continent.
In the US, an improvement in housing and non-residential construction is expected this year.
Regarding the unrest in the Ukraine, where CRH employs 1,500 people and holds €450m worth of assets, it said that it has seen limited impact on trading due to its operations mainly being located in the west of the country.
The company, however, added that the medium-to-long-term outlook remains “uncertain”.
Just last year, the group became the market leader in the country after spending €96m on acquiring local company, Mykolaiv Cement, from French producer, Lafarge.
Elsewhere, CRH said it remains “well on track” to deliver savings of €100m this year, as part of its overall aim of generating total savings of €535m between 2012 and 2015. This year’s contribution would bring cumulative savings, since 2007, to €2.5bn.
Management also said that second-half group Ebitda is expected to be “somewhat ahead” of last year, when the earnings amounting to €1.08bn.
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