CRH targets 6% earnings boost as markets improve
CRH expects full-year earnings, for 2018, to come in at around €3.35bn, which would be more than 6% ahead of last year.
In its latest trading update, the building materials company reported an 8% year-on-year rise in earnings on an earnings before interest, tax, depreciation and amortisation to €2.5bn for the first nine months of the year, driven by continued positivity in its European operations and improved demand in Asia. It is active in China, India and the Philippines.
Improved volumes and prices, and strong demand in the latter market, where CRH has had difficulties for some time, boosted like-for-like sales by 3% in the nine months.
The Philippines market was also helped by increased government spending.
“As we look forward to 2019, we expect favourable market fundamentals to continue across our key markets,” it said.
CRH said that the strategic review of its European distribution business which saw a 1% rise in sales in the first nine months of the year, but a 4% drop in earnings, remains ongoing.
It said its previously- announced plan to generate €7bn of financial capacity by 2021 is “progressing as planned”, with early signs of delivery expected by next year.
“As part of this growth plan, we have identified approximately €100m of structural cost savings — primarily in the areas of overhead reductions, back office rationalisation and the consolidation of certain regional support functions into central and more co-ordinated hubs,” it said.
CRH also said it has begun the third phase of its €1bn share buyback plan, and is due to spend a further €100m by the end of December.
