Building materials group CRH, parent company of Ibstock Brick, saw profits drop 10% in the first half of the year.
Pre-tax profit for the six months fell to €606m, compared to €670m a year earlier. The trading statement released in July estimated pre-tax profit would be around €600m. Earnings per share fell 8% to 85.5 cent.
In Europe, operating profit grew 4%to €515m. This was mainly driven by a 20% increase in operating profit in the materials division, and offset by a 12% decline in products operating profit and a 3% fall in profits from the distribution unit.
The Americas region fared worse, with operating profit falling 29% year on year to €197m. Poor weather impacted first-half materials operating profit, which fell 47%, while profits in the products sector fell 12%. Operating profit in distribution rose 10%.
“The outlook for the Americas Materials division appears to have deteriorated over the past number of weeks and full-year guidance is well below our current forecast,” Davy Stockbrokers said in a market briefing. ” We will likely reduce our full-year 2008 forecasts by 2-3 per cent and our 2009 forecasts by 5-10 per cent.”
The company also spent about €700 million on buying up firms in the first half of the year including a 45% share in Indian cement manufacturer My Home Industries, and the buyout of UK construction accessories producer Ancon.
CRH also warned of tough trading conditions for the year, saying the weak dollar would have an impact on the outcome for 2008.
“The percentage decline in full year profit before tax is expected to be broadly similar to that reported for the first six months, with a lesser reduction in earnings per share due to the ongoing share buyback and an expected lower percentage tax charge,” said chief executive Liam O’Mahony.