Building materials group CRH has reported a 37% increase in pre-tax profits for the six months to the end of June 2006. Pre-tax profits rose to €526m from €384m the same time last year as CRH said it was on track to post a 'healthy' full-year rise despite weakening US growth.
CRH's sales revenues for the first half of 2006 rose by 27% to €8.028 billion from €6.329 billion. The company reported an improved organic operating profit performance in each of its six business segments, with an especially strong performance from its operations in the US.
The company said its earnings per share rose by 32% to 73.7 cent for the six month period. CRH said it had decided to pay an interim dividend of 13.5 cent per share, an increase of 20% on the 2005 interim dividend of 11.25 cent.
So far this year, the company has spent almost €2 billion on acquisitions, including the recently announced €1 billion APAC deal in the US. The purchase was declared complete this morning.
CRH's Europe Materials group saw sales rise by 10% to €1.334 billion in H1, while operating profits rose by 8% to €152m. It said that overall Irish construction activity grew further. Continuing good housing and commercial activity resulted in higher cement and readymixed concrete volumes, although demand for stone and asphalt varied somewhat across the country.
It added that the impact of higher input costs was offset by continuing gradual price recovery, contributed to a modest advance in operating profits.
The group's operations in Finland delivered a 'strong performance' helped by broad based construction demand. Operating profits from Finland and the Balkans were well ahead of 2005. CRH said that construction demand in Poland recovered rapidly from a weather affected start. In Ukraine, improved pricing and efficiency savings more than offset lower cement volumes and increased gas costs to give an improved operating profit.
In Switzerland, profits from its cement operations declined - as expected - after the finishing of the concrete intensive stages of the major Loetschberg alpine tunnel project. But CRH said its Spanish operations enjoyed a favourable first half with the profit outcome in line with last year. CRH's Portuguese joint venture faced reduced cement demand in its home market and operating profits came in lower.
In CRH's Europe - Products division, sales jumped by 25% to €1.486 billion, while operating profits were up by 30% to €112m. At its Europe - Distribution division, sales increased by 30% to €1.319 billion, while operating profits were up 33% to €66m.
CRH's Americas - Materials Division saw a 31% increase in sales to €1.393 billion, while operating profits came in at €35m, up from the traditional H1 loss of €4m. The performance was helped by a mild winter which facilitated early private sector construction activity.
The company's Americas - Products division reported a 36% rise in sales to €1.813 billion, while operating profits spiked by 40% to €202m. CRH said the business enjoyed an 'excellent' first half, helped by generally favourable weather, good levels of US housing activity and sustained improvement in US non-residential construction demand.
Sales at its Americas - Distribution division were up 35% to €683m, while profits jumped by 64% to €46m. CRH said that with 65% of revenues generated in the repair, maintenance and improvement segment, moderation in new housing demand had little adverse impact on business in the first six months of 2006.
The company said that the current business outlook is on the whole positive despite some statistical evidence of a lower pace of US economic growth. 'CRH has had a particularly good start to the year, our ongoing focus on the recovery of higher input costs is showing good success and we have delivered record development activity over the past 12 months,' the company results statement said.
'While as always risks remain, especially in light of recent international developments, we expect good profit growth in the more significant second half and a healthy advance for 2006 as a while,' the statement concluded.
CRH shares closed up 48 cent to €26.65 in Dublin this evening.
