Building firm upbeat as it returns profit of €61m

CRH expects to see its financial recovery continue during the second half of the year, after swinging back into profit in the first six months.

The Dublin-headquartered building materials and cement products giant yesterday reported pre-tax profits of €61 million for the first half of 2014; up from a loss of €71m for the corresponding period last year. While 2013, on the whole, saw CRH report a €215m pre-tax loss, chief executive Albert Manifold said it represented a turning point in the group’s profit cycle and growth was returning.

The first half of this year also saw CRH’s operating profits jump from €41m to €171m; interim revenues grow by 4% to €8.32bn and EBITDA grow, year-on-year, by 27% to €505m.

A swing from a first half loss per share of 7.8c, last year, to earnings per share of 6.1c this year was also noted; while management maintained its first half dividend of 18.5c per share.

Mr Manifold said the year had gotten off to “an encouraging start”, helped by market recovery in the US and good weather conditions in Europe.

“Economic indicators continue to be positive in the Americas, while in Europe we have seen some easing of trends in recent months,” he said.

He added that management expects second half earnings (EBITDA) to be “somewhat ahead” of last year’s tally of €1.08bn. A full-year pre-impairment profit is expected.

“In the Americas, against the backdrop of positive economic indicators, we continue to expect an improvement in housing and non-residential construction in 2014, with infrastructure activity likely to be stable,” Mr Manifold said, adding that overall the Americas market should be ahead in the second half of the year.

For the first half, CRH saw strong double-digit earnings growth across its European products, materials and distribution businesses. The Americas operations provided more of a mixed-bag — with the materials division there seeing flat revenues, 21% EBITDA growth and a 23% cut in operating losses; but products seeing a drop in profits and minimal revenue growth and the distribution unit seeing good earnings increases.

For 2014, as a whole, CRH is expecting to see somewhere in the region of 3% combined revenue growth in its European operations and 4% in the Americas.