CRH sees profit topping forecast on higher prices, infrastructure demand (updated)
24/08/2023 13:05
(Adds detail, CEO quotes)
DUBLIN, Aug 24 (Reuters) - CRH CRH.L , the largest
building materials producer in the United States and Europe,
expects full-year core profit to increase by a larger than
expected 11% due to higher prices and robust demand for
infrastructure and non-residential projects.
The Dublin-based group, which makes about 75% of its profits
in the United States, expects full-year earnings before
interest, tax, depreciation and amortisation (EBITDA) of $6.2
billion versus the $5.9 billion expected by analysts polled by
Refinitiv.
CRH reported a 14% increase in first half EBITDA to $2.5
billion on Thursday, with profits up in all its divisions apart
from Europe Building Solutions, which was down 15% year-on-year
due to extended poor weather and new build residential weakness.
"Even though we are missing more than one-third of our
business through residential, the other two thirds are very
strong and I think it attests now to the strength of the
business model that we have and the position of our markets,"
CEO Albert Manifold told Reuters in an interview.
Manifold said U.S. government infrastructure stimulus
would lead to a protracted period of growth there for the next
five to seven years, while the so-called "reshoring" of critical
supply chain manufacturing back to the United States and Europe
would continue to boost non-residential projects over the same
period.
That meant the group's record profitability "looks good to
continue into 2024," he said.
CRH's EBITDA margin also increased by 90 basis points to
15.6% in the first half after the company implemented mid-single
to double-digit percentage price increases across the United
States and parts of Europe.
Manifold said he expected further mid to high single digit
price hikes in the United States in the second half of the year
and that it would take at least a year or two - or as much four
in the case of Europe - to recover all the unprecedented cost
increases incurred during 2022.
(Reporting by Padraic Halpin
Editing by Mark Potter and Susan Fenton)
((padraic.halpin@thomsonreuters.com; +353 1 500 1504; Reuters
Messaging: padraic.halpin.thomsonreuters.com@reuters.net))