CRH announced earnings of €3.3 billion in 2017, compared to €3.13 billion in 2016, on increasing underlying demand in the Americas and positive momentum in Europe.
“Despite hurricane activity and record levels of rainfall during the year, our Americas operations benefitted from the continuation of stable market fundamentals in the US and good underlying demand,” the company said in its full year results. Organic sales were up 3% in its Americas Materials Division with cement volumes also up 3%.
Cement prices were also marginally up on the previous year, supported by stronger demand in the US.
“Against the backdrop of favourable US price environment, Americas Materials continued to optimise its terminal network and market penetration by repositioning more volumes to the US from Canada, where competitive market conditions remain, especially in Quebec.”
CRH is expanding its presence in the US cement industry, completing the acquisition of Suwannee American Cement in November 2017. Meanwhile, its acquisition of Ash Grove Cement is scheduled to close in this year. Following the two deals, CRH is expected to be fourth largest cement producer in the US, according to a recent note from Jeffries, with 11.7 million t of capacity.
Europe also provided mostly good news for the Irish multinational. Cement volumes rose in Ireland, France, Finland, Poland, Hungary, Slovakia and Serbia, while UK cement operations were stable and price increases in Ukraine offset lower volumes, boosting operating profit.
Swiss and German markets were more challenged, however. Overall domestic cement consumption in Switzerland was down, while pressure from imports depressed prices. In Germany, CRH reported lower cement volumes due to reduced demand in key rural markets, a competitive market landscape, and individual project delays.
Asia also provided a more difficult operating environment with sales in the Philippines suffering from slow progress on major infrastructure projects, while pricing was driven down by aggressive competition from other players in the market. Coupled with higher fuel and power costs, the company report lower operating profit.
In India, where CRH holds a stake in My Home Industries (MHIL), higher fuel prices offset higher cement volumes and prices, reducing MHIL’s operating profit. There was an improvement in China, where CRH holds a stake in Yatai Building materials.
“Prices significantly improved in the market with both cement and clinker prices in Yatai Building Materials well ahead of 2016,” the company said. “The higher prices more than offset increased coal prices and resulting in improved performance in 2017.”
Looking ahead, the company expects 2018 “will be a year of continued growth for the group,” Albert Manifold, CRH’s CEO said, built of improving economic fundamentals in Europe and the US. Challenges will remain in the Philippines, however, although some stabilisation in the cement market there is anticipated.
Read the article online at: https://www.worldcement.com/asia-pacific-rim/01032018/crh-announces-another-year-of-growth-in-2017/
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