Building materials group CRH said a weak economic backdrop and bad weather hit its European sales in the year to date, but the rate of decline moderated in April.
But the company is expecting performance to improve in the second half of the year, predicting earnings will exceed that of the latter half of 2012, provided extreme weather remains at bay.
In an interim management statement this morning, CRH said like for like sales were down 13 per cent in the first quarter, although that fall had slowed to 12 per cent by April. CRH’s materials division was also hampered by weak construction activity, with cumulative like-for-like sales for the division down 17 per cent compared to the previous year. Cement volumes were 39 per cent lower by April in Poland, with the Ukraine falling 17 per cent.
Ireland and Spain continued to face “challenging” market conditions, the company said.
However, volume in Switzerland was “strongly ahead”, and Finland also showed some progress.
Bad weather also impacted the US, where improving economic and construction trends were offset by severe weather, leading to a fall of 2 per cent in like for like sales.
The company said it predicts earnings before interest, taxation, depreciation and amortisation to reach €400 million in the first half of the year, slightly lower than the €480 million restated earnings of the first half of 2012. The restatement was due to changes in reporting standards effective from this year.
Looking ahead to the second half of the year, the company said it expects nderlying positive trends in US to offset trading pressures in Europe.
CRH said it will focus in additional measures to cut costs in Europe as it battles market weakness. Source: The Irish Times