CRH Plc Posts Profit In H1

(RTTNews) - UK-based building materials group CRH Plc (CRH.L, CRH) reported Tuesday a profit in its first half, compared to last year's loss, following higher sales mainly in Europe. Further, the company maintained its dividend, and backed its growth forecast for EBITDA, a key earnings metric, for the second half.

The first-half profit before tax was 61 million euros (about $81.46 million), compared to prior year's loss of 71 million euros.

Basic earnings per share was 6.1 cents, versus loss of 7.8 cents last year. Operating profit soared to 171 million euros from 41 million euros a year ago.

Earnings before interest, tax, depreciation and amortisation or EBITDA grew 27 percent from last year to 505 million euros, reflecting strong operating leverage, and was in line with AGM guidance. The overall Group EBITDA margin improved 1.1 percentage points to 6.1 percent. The company noted that EBITDA/sales margins improved in five of its six reporting segments.

For the six months, sales revenue increased 4 percent to 8.32 billion euros from 8.01 billion euros a year ago.

Sales went up 7 percent in Europe, and grew 1 percent in the Americas despite very severe weather conditions.

On a like-for-like basis, excluding the impact of acquisitions, divestments and exchange translation, underlying sales were 5 percent higher than last year.

Chief Executive Albert Manifold said, "2014 got off to an encouraging start with favourable weather in Europe and continuing recovery in the US. We are pleased with the strong operating leverage which is reflected in margin improvement for the period. Economic indicators continue to be positive in the Americas, while in Europe we have seen some easing of trends in recent months."

Further, the company said its Board has decided to maintain the 2014 interim dividend at last year's level of 18.5 cents per share.

Looking ahead, CRH continues to expect second-half Group EBITDA to be somewhat ahead of last year's 1.08 billion euros.

According to the firm, Europe has seen an easing of trends in recent months, and the uncertain political backdrop in Ukraine remains a cause for concern. Despite this, the company expects second-half performance to be broadly in line with last year. The company also continues to remain focused on implementing the cost initiatives already announced.

In the Americas, the company expects results to be ahead in the second half.

Regarding its ongoing cost reduction program, CRH said it remains on track to deliver 100 million euros for 2014 and a further 75 million euros in 2015 which will bring cumulative savings by end-2015 to 2.6 billion euros.

Further, the firm said its divestment programme, amounting to about 1.5 billion euros to 2 billion euros, is underway for businesses which no longer meet its returns and growth criteria.

In London, CRH shares were losing 12 pence or 0.82 percent, and trading at 1,444 pence.