CRH reports profit fall in first half

CRH recorded 2008 first half sales of € 9,7 billion, almost mirroring the same period of last year. However, with higher commodity prices and a weak dollar to euro exchange rate, the company reported a pre-tax profit of € 606 million, down -10% on the comparable 2007 period.

In Europe, the materials sector recorded a +7% increase in sales from € 1,6 billion in the first half of 2007 to € 1,8 billion in the first half of 2008. Profit jumped +20% to € 267 million from € 222million in 2007. “Whilst Irish and Spanish markets declined, advances in Poland and the Ukraine and a recovery in Portugal more than compensated,” said a company statement.

In the European products sector, sales rose by +4% on the comparable 2007 period to € 1,9 billion, but operating profit fell by -12% from € 180 million to € 158 million in 2008. “Particularly noticeable were clay operations in the UK, where we saw a second quarter slowdown in residential activity as well as higher input costs,” commented a company spokesperson.

All sectors in the Americas suffered during the first half of 2008 with materials sales down -14% to € 1,8 billion from € 2,1 billion in 2007 and pre-tax profit down -53% from € 66 million to € 31 million. The company attributed these figures to like-for-like sales declines as a result of higher prices (due to increased input costs) and delays in the highway construction season following exceptionally wet weather in May and June.

The Americas products sector suffered similarly to the UK with declines in residential construction. As a result, sales revenues were down -8% from € 1,8 billion in 2007 to € 1,6 billion in the first half of 2008. Profit was down -24% to € 137 million from € 180 million 12 months earlier.

Liam O’Mahony, chief executive of CRH said of the results, “Following 15 years of consecutive growth and a record performance in 2007, more difficult trading conditions and a weaker Dollar will, as previously indicated, result in a lower income for 2008. The percentage decline in full year profit before tax is expected to be broadly similar to that reported for the first six months.”