Poor weather and tough economic conditions in Europe saw earnings slip at building materials group CRH in the first half of the year.
Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 1% year-on-year from €574m to €568m in the six months to June 30th, more or less in line with the company's guidance in May of "close to last year's level".
While Americas EBITDA increased by 26%, Europe EBITDA fell 13% as trading was hit by "very severe weather conditions in February, and by deteriorating confidence as uncertainty continued regarding Eurozone economic issues."
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According to Chief Executive Myles Lee: "Problems in the Eurozone, which have intensified over the past six months, continue to erode consumer and business confidence in the wider European economy. In the Americas, current trends suggest that the benign early weather in the United States has resulted in some pull-forward of construction demand, while after good early momentum, the pace of economic growth has tempered over recent months.
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"Against this backdrop, we expect that EBITDA for the year as a whole will be similar to last year's level," he said.
EBITDA excludes a €196m profit on the disposals of its Secil business and German access control unit (€19m profit on disposals in the first half of last year) and a loss of €118m due to its shares of associates' results (2011: profit of €12m).
Including these, pre-tax profit increased by 23% from €95m to €117m. However, when taking these out from the bottom line, pre-tax profit dropped by 45% to €52m.
As for the top line, sales revenue gained 5% from €8,166m to €8,588m, helped by favourable FX movements, particularly the stronger dollar against the euro which contributed €305m of the increase. Sales jumped 20% in the Americas to €4.0bn, but slipped 5% in Europe to €4.6bn.
Net debt of €3.9bn at the end of the period was in line with last year, but the company assures that its balance sheet is one of the strongest in the sector.
The interim dividend per share was maintained at 18.5 cents.
BC
