CRH group sales up

By Sandy Guthrie27 April 2016

Group sales rose at CRH, the Irish-based international building materials group, by 9% in the first quarter of 2016 compared with the same period last year.

The group reported that a positive trading backdrop in its major markets had led to the rise, with the Americas up 22%, Europe in line and Asia 12% ahead.

It added that group EBITDA (earnings before interest, taxes, depreciation and amortization) for what it described as the seasonally less significant first half of the year, was expected to be close to €1 billion.

The 2015 sales and EBITDA have been calculated on a constant currency basis, including 2015 trading results of the now integrated LH Assets and CRL, and excluding all divested entities and one-off items.

CRH said it expected to continue to make progress in the second half of the year on a group EBITDA basis.

The Americas, where the economic and business environment was said to remain favourable, benefited from very good weather in the early months of the year, and CRH said that activity in the typically low-volume first quarter was ahead. Sales for the Americas were up 22% compared with the first quarter of 2015.

In Europe, it said the stabilising trends noted towards the end of 2015 continued across its main markets in the first quarter, albeit with regional variations. This resulted in overall sales in line with 2015.

In Asia, with strong cement demand in the Philippines, sales were 12% ahead of the first quarter of 2015.

CRH said that it expected first half EBITDA in Europe to be slightly up on 2015, while in the Americas, with the benefit of a positive environment and the strong start to the year, EBITDA was expected to be well ahead. The Philippines is expected to be ahead thanks to continued good demand.

As a result, CRH said it expected total group EBITDA for the first half of the year – which it again said was seasonally less significant – to be close to €1 billion, representing mid-single digit percentage growth compared with 2015.

Second half

Looking ahead to the second half of the year, CRH expects Europe to see a broadly stable backdrop to support some improvement across the group’s main markets.

In the US, it forecast construction demand to continue to grow in the second half of the year at a modest pace. Funding for US infrastructure is expected to increase moderately with improving State finances and the passing in 2015 of a new federal programme (FAST Act). Also, it predicted housing and non-residential construction to continue to grow, so as a result, it expects progress in the Americas.

Results in the Philippines are expected to be ahead of the second half of 2015. Against this backdrop and in the absence of any major financial or energy market dislocations, it expects to continue to make progress on a group EBITDA basis in the second half of 2016.

A number of divestments and asset disposals have been completed with total proceeds of €78 million during the first quarter. CRH said spend during the period on acquisitions and investments amounted to €85 million, most of which related to bolt-on transactions in the Americas materials division.

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