CRH expect to break €1bn profits barrier
Building materials group CRH expects to break the €1bn profits barrier for 2004, up from profits of €864m in 2003.
In a trading statement issued today, CRH credited a return to more normal seasonal weather patterns in Northern Europe and North America for the profits hike, adding that "modest" market improvements also contributed.
These factors, combined with contributions from acquisitions and only a minor adverse translation impact due to seasonally-low first half US Dollar operating profits, resulted in a 71% increase in profit before tax for the six months to €275m, up from €161m in 2003.
Profit before tax in the second half of the year is expected to show an advance over the 2003 outcome of €703m.
In Ireland, a record estimate of 77,000 houses were built, compared with 68,800 in 2003. CRH said today that demand from the infrastructure sector was also strong in 2004 but eased somewhat in the closing months as some major projects were completed ahead of schedule.
"After a flat first half, the second half of the year brought evidence of improving commercial and industrial activity," the company said today.
Although product prices failed to compensate for cost increases and margins declined somewhat, volumes for the year show satisfactory increases and operating profits are expected to be similar to the 2003 level.
Commenting on operations in Britain and Northern Ireland, CRH said ibstock brick volumes were just below 2003 levels, and further price improvements were achieved.
Concrete products operations saw increased demand, underpinned by a robust performance from the masonry division. UK fencing operations had a good year helped by some major security projects.
In the materials division, Northern Ireland operations saw higher activity in housing and infrastructure markets. With organic profit improvements and the benefits of a modest strengthening of sterling against the euro, full year operating profits will show an increase on 2003 levels, the company said.
