8-K

CRH PUBLIC LTD CO 8-K Report (Aug 25, 2010)

Filed August 25, 2010For Securities:CRH

Summary

CRH Public Ltd Co. reported its interim results for the six months ended June 30, 2010. The company experienced a significant decline in profitability, with profit before tax down 77% year-over-year to €25 million, and earnings per share dropping 79% to 2.6 cents. This downturn was primarily driven by weaker than expected volumes and increased pricing pressure in its Americas Materials business, attributed to lower commercial construction and reduced state/municipal projects in the United States. Adverse weather conditions also impacted performance in Europe during the early part of the year. Despite these challenges, CRH maintained its interim dividend at 18.5 cents per share, reflecting a strong balance sheet and anticipated second-half cash inflows. The company has also provided a revised full-year outlook, now expecting Group EBITDA to decline by approximately 10% compared to 2009, a slight downward revision from previous expectations. CRH remains focused on cost reduction, cash generation, and strategic bolt-on acquisitions, highlighting its robust financial position to navigate the challenging market environment.

Key Highlights

  • 1Revenue decreased by 8% to €7,658 million for the first half of 2010 compared to the same period in 2009.
  • 2EBITDA fell 20% to €520 million, and Operating Profit declined significantly by 51% to €118 million.
  • 3Profit before tax saw a substantial drop of 77% to €25 million, with earnings per share decreasing by 79% to 2.6 cents.
  • 4The Americas Materials segment experienced weaker than expected volumes and more competitive pricing, impacting profitability.
  • 5CRH maintained its interim dividend at 18.5 cents per share, demonstrating confidence in its financial position and future cash flows.
  • 6Net debt stood at €4,762 million at June 30, 2010, with a net debt/EBITDA cover of 2.8 times.
  • 7The company now anticipates a full-year Group EBITDA decline of approximately 10% compared to 2009.

Frequently Asked Questions

The primary reason for the significant decline in profitability was the weaker-than-expected performance in the Americas Materials business. This was due to lower volumes and increased pricing pressure, driven by reduced commercial construction and cutbacks in state and municipal projects in the United States. Adverse weather conditions in Europe also contributed to the weaker results in the early part of the year.

CRH now expects its full-year Group EBITDA to decline by approximately 10% compared to the 2009 level of €1.8 billion. This revised outlook reflects the challenging market conditions encountered, particularly in the second half, and less favorable currency translation effects.

No, CRH has maintained its interim dividend at 18.5 cents per share, the same as the previous year. The company cites its strong balance sheet and anticipated strong second-half cash inflows as reasons for maintaining the dividend. The final dividend will be decided in March 2011.

CRH continues to focus on cost reduction and cash generation. It is also actively pursuing bolt-on acquisitions, having spent €159 million in the first half and an additional €86 million in July and August. The company maintains a patient approach to acquisitions due to the challenging market but is well-positioned to capitalize on opportunities as visibility improves.