CRH sees US operations offsetting weaker European market

In trading statement released today, CRH said the first four months of 2013 were affected by adverse weather conditions but expects growth in the second half to be led by its US operations.

Combined with a challenging economic environment, most of CRH’s European operations experienced lower activity and sales declined 12 per cent (approximately €0.3bn) in the first four months of the year compared to the same period of 2012.

Wet and cold conditions also persisted in the US in the first four months of this year in contrast to mild weather in the same period of 2012. Despite the improving trend in overall construction activity, CRH reported a two per cent decline (approximately EUR0.05bn) in its Americas operations  on a like-for-like basis.

CRH expects profits to advance in the Americas as the recovery in residential and non-residential activity continues and as its Materials division gear up for the 2013 construction season. However, the company noted that continuing weakness in the European economic backdrop indicates that it is unlikely that any of the shortfall in sales or profitability in to-date compared to 2012 can be recouped in May/June.

These factors, combined with the absence of €44m non-recurring first-half 2012 gains relating to pension curtailment and CO2 trading in its Europe Materials Division, lead the company to expect earnings in the first six months of the year to be around €400m, lower than the €480m reported the same time last year.

Going forward, CRH expects headwinds in Europe are likely to be outweighed by progress in the Americas. “We see more positive trends emerging in our non-residential markets, and activity in infrastructure is expected to benefit from measures in several states to enhance revenue streams for transportation projects,” CRH said. In Europe however, where significant trading pressures continue, the company is focused on implementing further measures, in addition to the initiatives already announced, to reduce our cost base and counteract market weakness.