8-K

CRH PUBLIC LTD CO 8-K Report (Aug 27, 2008)

Filed August 27, 2008For Securities:CRH

Summary

CRH Public Limited Company (CRH) reported its interim results for the six months ended June 30, 2008. The company experienced a 10% decrease in profit before tax, reaching €606 million, and an 8% decline in earnings per share to 85.5 cents. This performance was impacted by more difficult trading conditions and a weaker US dollar, which had an adverse translation effect of €21 million. Despite these challenges, CRH maintained a strong EBITDA/net interest cover of 9 times, well within its comfort range. The company also announced an increase in its interim dividend by 2.5% to 20.5 cents per share, continuing its long history of dividend growth. Geographically, operating profit in Europe showed a modest increase, primarily driven by the Materials segment, while Americas operating profit saw a significant decline, largely due to challenging weather and weaker demand in the US construction market. CRH has continued its acquisition strategy, investing €0.7 billion in the first half of the year, including a significant stake in an Indian cement manufacturer. The company anticipates continued challenging trading conditions for the remainder of 2008 but remains focused on operational efficiency and cost management.

Key Highlights

  • 1Profit before tax decreased by 10% to €606 million for the six months ended June 30, 2008, compared to €670 million in the prior year.
  • 2Earnings per share (EPS) fell by 8% to 85.5 cents, down from 92.8 cents in the first half of 2007.
  • 3Revenue remained stable at €9,704 million, unchanged from the previous year.
  • 4EBITDA decreased by 3% to €1,104 million, and operating profit decreased by 8% to €712 million.
  • 5The interim dividend was increased by 2.5% to 20.5 cents per share.
  • 6Acquisitions and investments totalled €0.7 billion in the first half of 2008, including a 45% stake in Indian cement manufacturer My Home Industries.
  • 7The company highlighted ongoing challenging trading conditions and currency headwinds, particularly the weaker US dollar, impacting reported results.

Frequently Asked Questions

The decrease in profit before tax was primarily driven by more difficult trading conditions in some of CRH's key markets, particularly in the Americas, and the adverse impact of currency translation due to a weaker US dollar against the Euro. Additionally, certain segments like Americas Materials experienced significant volume declines due to poor weather conditions.

Europe saw a modest increase in operating profit, driven by a strong performance in the Materials segment, which benefited from advances in Eastern Europe and Portugal. In contrast, the Americas segment experienced a significant decline in operating profit, particularly in Materials, due to adverse weather and a slowdown in residential and non-residential construction activity.

CRH anticipates that the challenging trading conditions and currency headwinds experienced in the first half will continue into the second half of the year. The company expects the percentage decline in full-year profit before tax to be broadly similar to that reported for the first six months. However, they are focused on operational efficiency, cost reduction measures, and leveraging their geographic and sectoral balance to underpin performance.

CRH continues to pursue its acquisition strategy, investing €0.7 billion in the first half of 2008. This included strategic acquisitions like a 45% stake in Indian cement manufacturer My Home Industries and a UK construction accessories producer. The company is focusing on projects and opportunities that offer compelling value and a strong strategic fit, especially in challenging market conditions.