CRH scales back profit guidance

Building materials giant CRH has scaled back its earnings forecast this year on the back of ongoing weakness in Europe and Hurricane Sandy disrupting its operations in eastern America.

Building materials giant CRH has scaled back its earnings forecast this year on the back of ongoing weakness in Europe and Hurricane Sandy disrupting its operations in eastern America.

After a flat like-for-like (LFL) sales performance in the first half, with an 8% increase in the Americas being offset by a 5% decline in Europe, CRH experienced "much lower growth in our Americans operations and a higher rate of decline in Europe" in the third quarter. As such, group LFL sales declined by 3% and were down a total 1% for the first nine months of they year.

However, overall sales revenue (which includes the net impact of acquisitions, divestments and exchange rate movements) rose 1% in the quarter to €5.3bn, with nine-month revenues up 4% at €13.5bn.

Earnings before interest, tax, depreciation and amortisation (EBITDA) was flat in both the third quarter (at €0.65bn) and year-to-date (€1.2bn).

Going into the final three months of the year, the company said that while the storms in the US should result in increased demand for reconstruction work next year, they have caused "significant disruption" to its operations over the past two weeks.

"With this negative short-term impact, and the ongoing weakness in certain major European markets, we anticipate that EBITDA for the last three months of the year will be below 2011," CRH said.

What's more, the group is facing tough comparatives: mild weather in November/December 2011 in both Europe and the US contributed to a strong fourth-quarter EBITDA outcome last year.

Full-year EBITDA this year is expected to come in at €1.6bn, below 2011's€1.65bn. The company's guidance in August was for a flat reading year-on-year, with adverse exchange rate movements also having an impact.

Recommended

A new legal headache for Haleon
Stocks and shares

A new legal headache for Haleon

Haleon, GSK’s former consumer-products arm, spun off last month, has made a dismal debut on the stockmarket.
17 Aug 2022
Persimmon yields 12.3%, but can you trust it to deliver?
Share tips

Persimmon yields 12.3%, but can you trust it to deliver?

With a dividend yield of 12.3%, Persimmon looks like a highly attractive prospect for income investors. But that sort of yield can also indicate compa…
17 Aug 2022
Cineworld faces a bleak future – investors should stay away
Share tips

Cineworld faces a bleak future – investors should stay away

Weighed down by crippling debts and with consumers tightening their belts, Cineworld's future does not look bright, says Rupert Hargreaves. Investors …
17 Aug 2022
Britain’s ten most-hated shares – w/e 12 August
Stocks and shares

Britain’s ten most-hated shares – w/e 12 August

Rupert Hargreaves looks at Britain's ten most-hated shares, and what short-sellers are looking at now.
16 Aug 2022

Most Popular

Don’t listen to the doom-mongers – the future is bright
Economy

Don’t listen to the doom-mongers – the future is bright

With volatile markets, raging inflation and industrial unrest, it may feel like things are bad and likely to get worse. But the end of the world is no…
15 Aug 2022
Investors should get ready for a political revolution
UK Economy

Investors should get ready for a political revolution

Liz Truss will beat Rishi Sunak, cut taxes, and then shake up the Bank of England, says Helen Thomas
15 Aug 2022
How solar panels could lower your energy bill
Energy

How solar panels could lower your energy bill

Solar-panel installation firms are reporting a four-fold increase in orders this year compared with 2021. Ruth Jackson-Kirby explains how solar can he…
14 Aug 2022