CRH reports stable and satisfactory growth
Published by Rebecca Bowden,
1H17 saw stabilising trends in certain European markets and satisfactory growth in the Americas, which more than offset reduced activity in Asia due to a challenging market environment in the Philippines. Sales of €13.0 billion for the period were 2% ahead of the same period last year and were 1% ahead on a like-for-like basis. In Europe, like-for-like sales growth of 3% reflected continued recovery in some key markets. In the Americas, like-for-like sales were 1% ahead of 1H16, despite less favourable weather conditions and very challenging prior year comparatives. Like-for-like sales in Asia were 8% below 1H16.
Overall EBITDA was 5% ahead of 1H16. On a like-for-like basis, first half EBITDA for the Group was 2% ahead, with Europe up 2% supported by modest price recovery and volume improvements in a number of major markets, while like-for-like EBITDA in the Americas was 6% ahead reflecting price improvements and strong cost control. Like-for-like EBITDA in Asia was 39% below 1H16 on the back of a very competitive trading environment. With a continued focus on performance in all our businesses, margin improved to 9.0% (1H16: 8.8%).
Depreciation and amortisation charges of €528 million were broadly in line with last year (1H16: €532 million), which, together with the 5% increase in EBITDA, resulted in a 10% increase in first half operating profit to €647 million (1H16: €588 million).
Divestments and asset disposals during the period generated total profit on disposals of €45 million (1H16: €20 million) as the ongoing recycling of capital continues to be embedded in the business.
The Group's €14 million share of profits from equity accounted entities was ahead of 1H16 (1H16: €5m) reflecting improved results in our associate investment in China.
Net finance costs for the period were below 1H16 at €189 million (1H16: €206 million), as the cost of €19 million for the early redemption of a portion of the US$ bonds maturing in 2018 was more than offset by lower costs of reduced debt.
First half profit before tax was €517 million, compared with a profit of €407 million in 1H16. The interim tax charge, which represents an effective tax rate of 28% of profit before tax has been estimated, as in prior years, based on current expectations of the full year tax charge. Earnings per share for the period amounted to 43.5c (1H16: 33.8c).
In Europe CRH expects the momentum experienced in 1H17 to continue and second half EBITDA to be ahead of 2016. In the Americas, CRH anticipates the solid fundamentals to be maintained, with both residential and non-residential activity improving; for US infrastructure, while it expects that the funding stability provided by the FAST Act will lead to a positive trend in volumes for H2, higher input costs are also anticipated. Overall, EBITDA in the Americas is expected to be ahead. In Asia, our expectation is that challenging market conditions in the Philippines will continue in the second half and EBITDA will decline further. Against this backdrop and despite currency headwinds, CRH continues to expect another year of progress for the Group.
Albert Manifold, Chief Executive, said today: "We have had a satisfactory start to 2017 with stabilising trends in key European markets and EBITDA growth in the Americas. The acquisition and divestment activity announced by the Group today, demonstrates our ongoing strategic focus on allocating and reallocating capital at attractive multiples, while our significant Balance Sheet capacity ensures we are well positioned for further growth. I am pleased to report, in line with our progressive dividend policy, that the Board has decided to increase the interim dividend by 2.1% to 19.2c per share. For the second half of the year, despite currency headwinds and continuing challenging conditions in the Philippines, we expect a continuation of the first half momentum experienced in Europe and EBITDA growth in the Americas, which will result in another year of progress for the Group."
Read the article online at: https://www.worldcement.com/europe-cis/24082017/crh-reports-stable-and-satisfactory-growth/
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