Group sales at building materials giant CRH are up 4% in the year to date on a like-for-like basis, but the group’s earnings have been dragged back by under-performance in its European operations.
In its latest trading update, published yesterday, the group said its Americas operations had benefited from good weather conditions in the first four months of the year, but that more severe weather conditions on this side of the Atlantic — particularly in February — coupled with eurozone volatility had hampered earnings in Europe.
That said, management told shareholders at the group’s AGM yesterday that the company was likely to see overall like-for-like sales growth for 2012. The second half of the year tends to be the more significant period for CRH in terms of earnings power.
Management came in for some criticism at yesterday’s AGM, ranging from employees of subsidiary company, Irish Cement — workers of which have been on strike for over a month regarding pay issues — to individual shareholders lodging accusations of corporate governance breaches.
There was also a strong call from pro-Palestinian activists for CRH to dispose of its interests in Israel. CRH’s Israeli subsidiary, Mashav, owns 25% of the country’s sole cement manufacturer, Nesher Cement Enterprises.
Speaking after the meeting, CRH chief executive Myles Lee said management would consider all opinions of shareholders, but its presence in the Middle-East hasn’t been a concern for institutional investors. With regard to Irish Cement, Mr Lee said CRH wanted to see a settlement arrived at, adding that the company could have the capacity to export up to 250,000 tonnes of cement this year.
Mr Lee also poured cold water on speculation that CRH could make a move for some of the businesses UK road surfaces company Tarmac is likely to have to dispose of in order to gain approval for its joint venture with the British arm of French group Lafarge.
“We’ll look at anything that comes up in the market, but the lack of synergy between what we have in Britain and what could be on sale would mean our ability to put in an attractive bid would be limited,” he said.
He added that management still saw India as a long-term growth opportunity and the group was likely to up its presence in China next year.
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