8-K

CRH PUBLIC LTD CO 8-K Report (Jul 21, 2009)

Filed July 21, 2009For Securities:CRH

Summary

CRH Public Limited Company (CRH) filed an 8-K on July 21, 2009, providing an interim trading statement for the six months ended June 30, 2009. The report indicates a significantly challenging trading environment due to the global recession, leading to an expected operating profit of approximately one-third of the prior year's first half. Profit before tax is projected to be around €0.1 billion, down from €0.6 billion in H1 2008, impacted by approximately €75 million in restructuring costs and a €20 million adverse currency translation impact. Despite these headwinds, CRH highlighted its intensified focus on cost savings, announcing new measures expected to deliver an additional €555 million in annualized gross savings for 2009 and 2010. This is in addition to €895 million in savings previously announced. The company also noted significant financing capacity, bolstered by a March 2009 rights issue, positioning them to pursue disciplined development opportunities. Positives for the second half include benefits from cost reductions, moderating energy costs, and improving infrastructure spending in the US and some European markets.

Key Highlights

  • 1Operating profit for H1 2009 is expected to be approximately one-third of H1 2008's €0.7 billion.
  • 2Profit before tax is projected at around €0.1 billion, compared to €0.6 billion in H1 2008, including €75 million in restructuring costs.
  • 3New cost-saving measures aim to deliver an additional €555 million in annualized gross savings in 2009-2010, bringing the total over 2007-2010 to €1.45 billion.
  • 4Challenging trading conditions persist in Europe, particularly in Ireland, Finland, and Eurozone countries, though some Eastern European markets are expected to show a more robust (though lower than 2008) performance in H2.
  • 5The Americas division faces difficulties in residential and non-residential construction markets, but expects improvement in H2 driven by infrastructure spending from the American Recovery and Reinvestment Act.
  • 6CRH has significant financing capacity following a March 2009 Rights Issue, enabling the pursuit of disciplined development opportunities.
  • 7The company anticipates moderating profit decline rates in the second half of 2009 compared to the first half.

Frequently Asked Questions

CRH expects a significantly challenging first half for 2009, with operating profit projected to be approximately one-third of the prior year's comparable period. Profit before tax is anticipated to be around €0.1 billion, impacted by substantial restructuring costs and currency headwinds.

CRH is intensifying its focus on cost savings, implementing new measures expected to generate an additional €555 million in annualized gross savings by 2010. This is part of a broader initiative to achieve €1.45 billion in cumulative savings over the 2007-2010 period. The company is also prioritizing cash generation and disciplined development opportunities.

Both divisions are experiencing difficult trading conditions. Europe faces ongoing weak demand in core markets, though some Eastern European markets might see a more robust performance in H2. The Americas are impacted by declines in residential and non-residential construction, but anticipate a stronger second half driven by infrastructure spending funded by government stimulus. Overall, CRH expects the rate of profit decline to moderate in the second half of 2009.

Yes, CRH states that it has significant financing capacity, enhanced by a Rights Issue completed in March 2009. This positions the company to manage its operations and pursue strategic development prospects effectively.