CRH plc. has issued its Trading Update for the period 1 January 2016 – 31 March 2016, in advance of its Annual General Meeting.
Group sales for 1Q16 increased by 9% compared with the same period in 2015, largely driven by continued positive momentum in the Americas where the economic and business environment remains favourable. With the benefit of very good weather in the early months of the year, activity in the typically low-volume first quarter was ahead and sales for the Americas were up 22% compared with Q115 proforma. In Europe, the stabilising trends noted towards the end of 2015 continued across our main markets in the first quarter, albeit with regional variations, resulting in overall sales in line with proforma 2015. In Asia, with strong cement demand in the Philippines, sales were 12% ahead of the proforma 1Q15.
First Half Outlook
The company expects first half EBITDA in Europe to be slightly up on proforma 2015 while in the Americas, with the benefit of a positive demand environment and the strong start to the year, EBITDA is expected to be well ahead. The Philippines is expected to be ahead due to continued good demand. As a result we expect total Group EBITDA for the seasonally less significant first half of the year to be close to €1 billion, representing mid-single digit percentage growth compared with proforma 2015.
Second Half Outlook
Looking ahead to the second half of the year, in Europe CRH expects a broadly stable backdrop to support some improvement across its main markets. In the United States, it expects construction demand to continue to grow in the second half of the year at a modest pace. Funding for US infrastructure is expected to increase moderately with improving State finances and the passing in 2015 of a new federal programme (FAST Act), while it is expected that housing and non-residential construction will continue to grow; as a result the company expects to see progress in the Americas. Results in the Philippines are expected to be ahead of 2H15. Against this backdrop and in the absence of any major financial or energy market dislocations, CRH expects to continue to make progress on a Group EBITDA basis in 2H016.
Development and Portfolio Update
CRH completed a number of divestments and asset disposals with total proceeds of €78 million during the first quarter. Spend during the period on acquisitions/investments amounted to €85 million, most of which relates to bolt-on transactions in the Americas Materials Division.
Adapted from press release by Rebecca Bowden
Read the article online at: https://www.worldcement.com/europe-cis/27042016/crh-trading-update-1q16-part-1-985/
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