CRH returns to first-half pretax profit

CRH's first half turnover advanced by four per cent to EUR8,324m and the EBITDA improved by 27.2 per cent to EUR505m. The trading profit jumped from EUR41m to EUR171m and after a net interest charge 2.7 per cent higher at EUR150m, the pre-tax result went from a loss of EUR71m to a EUR61m profit.

The net attributable result went from a EUR57m loss to a EUR46m profit. Net debt at the end of June was 11.6 per cent lower at EUR3,703m, giving a gearing level of 39.9 per cent, which compares with 38.8 per cent a year earlier. Capital expenditure in the period was 25.1 per cent lower at EUR215m while spending on acquisitions declined by 49.8 per cent to EUR115m.

Commenting on the results, CRH chief executive Albert Manifold said: “2014 got off to an encouraging start with favourable weather in Europe and continuing recovery in the US. We are pleased with the strong operating leverage which is reflected in margin improvement for the period. Economic indicators continue to be positive in the Americas, while in Europe we have seen some easing of trends in recent months."

Europe
The European heavy building materials operations increased turnover by 9.5 per cent to EUR1087m and the EBITDA staged a 74.6 per cent recovery to EUR103m, helped by favourable weather and improved underlying levels of demand.

Poland registered a substantial recovery in cement shipments, with industry volumes ahead by 22 per cent, though prices were two per cent lower than the comparable period last year. Underlying Ukrainian cement volumes up by 20 per cent, helped by a mild winter and the trading profit showed a substantial increase, helped by the addition of Mykolav Cement. In Finland, volumes in cement, aggregates and concrete were lower, but profits were maintained. Switzerland continued to perform strongly and there was another 12 per cent increase in cement shipments and higher downstream volumes, leading to improved margins. Irish profits showed an improvement and Belgium was also head, but Spain and the Netherlands did worse.

Turnover in building products staged a 9.9 per cent recovery to EUR1261m and the EBITDA jumped by 87.0 per cent to EUR1014m reflecting better weather conditions and improved volumes in Great Britain but there was continued weakness in France. The trading margin went from 0.3 per cent to 4.5 per cent. The brick operations did better, notably in Britain, but also in Poland and The Netherlands.

Concrete products and other materials also improved on the previous year. The European distribution turnover improved by 4.6 per cent to EUR1922m and the EBITDA recovered by a quarter to EUR79m boosted by stronger volumes in the first four months. The builder's merchants volumes improved strongly in Germany, France and Austria but margins were under pressure in Switzerland and the DIY business improved profits and margins.

North America
The North American heavy building materials turnover was just 0.5 per cent ahead at EUR1,718m, but in dollar terms there was a four per cent improvement. EBITDA rose by 21.2 per cent to EUR63m and the seasonal trading loss declined by 22.8 per cent to EUR61m.

Aggregates deliveries were six per cent higher (+4 per cent excluding acquisitions) and there was an underlying three per cent improvement in prices. Asphalt volumes were three per cent ahead and profitability improved, thanks to lower bitumen costs.

Ready-mixed concrete shipments were ahead by eight per cent (+7 per cent excluding acquisitions) and the underlying price was four per cent higher. Paving and construction services turnover was stable, but the margin did improve.

The building products turnover improved by 0.8 per cent to EUR1,575m but EBITA declined by 9.7 per cent to EUR131m and the trading profit was some nine per cent lower at EUR80m. Dollar turnover improved by 4 per cent in architectural products and by two per cent in pre-cast products. The distribution turnover edged ahead by 0.4 per cent to EUR761m and the EBITDA improved by 16.7 per cent to EUR28m and the trading profit grew by around 31 per cent to EUR17m.