CRH predicts annual earnings of up to €6.6bn as Q2 profits climb 9%

Chief executive Jim Mintern and chair Richie Boucher at CRH's AGM earlier this year. On Wednesday, the company reported a 9% rise in second quarter core profit. Picture: Naoise Culhane

Irish construction giant CRH expects the market for supplementary cementitious materials (SCM), a low-carbon alternative to cement, to double in the United States by 2050, its chief executive said on Wednesday.

CRH is now the largest building materials producer in the US and CEO Jim Mintern made the comments after the industrial giant reported a better than expected 9% rise in second quarter core profit and forecast full-year earnings of $7.5bn (€6.4bn) to $7.7bn (€6.6bn), versus a prior range of $7.3bn to $7.7bn.

The Irish-based, US-listed firm, which makes about 75% of its profit in North America, agreed to acquire US SCM supplier Eco Material Technologies for $2.1bn (€1.8bn) last month to meet growing demand for the alternative ash-based products.

"In particular what attracted us (to the deal) is that when you look out in the US, we estimate that the SCM market is going to double between now and 2050," Mintern said.

"This deal puts us right up there in terms of size and leadership levels in the US (and) gives us a very good growth platform."

The acquisition will boost CRH's capacity in the 135m metric ton US SCM market to about 25m tons, he added. CRH is the third largest cement manufacturer in both North America and Europe.

CRH's second quarter adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $2.5b (€2.13bn) were ahead of the $2.4bn expected by an average of seven analysts polled by LSEG SmartEstimate.

Mintern said the increase in the lower end of its full year guidance range was based on trading in the seasonally important month of July and a year-on-year increase in the volume and margins of contracted work across all major US product lines.

Reuters