11th Nov 2014 11:27
LONDON (Alliance News) - Building materials company CRH PLC Tuesday said its operating earnings and like-for-like sales grew in the third quarter, although at a slower pace than in the first half, as growing demand in the US offset moderating markets in Europe, and it reiterated its forecast for earnings growth of about 10% in the whole of 2014.
In a statement, the company said like-for-like sales, which exclude acquisitions and disposals and currency movements, grew 3% in the third quarter. That helped push up earnings before interest, tax depreciation and amortisation by 6% on the year, driven by 10% growth in the Americas.
Growth in the first half of the year had come mainly from Europe thanks to favorable weather that drove demand for building products. However, growth switched to the US in the third quarter, as the economic recovery there drove construction demand.
CRH reiterated that it expects its ebitda to grow about 10% on the year in 2014 as a whole, after a slowdown in the second half compared with the 27% growth it posted in the first half.
Its like-for-like sales had grown 5% in the first half of the year.
Like-for-like sales in Europe had grown 6% in the first half, but were down 2% in the third quarter, while Americas like-for-like sales growth accelerated to 6% in the quarter, from 4% growth in the first half.
"Against the backdrop of improving construction activity in the United States, our Americas operations benefited in the third quarter from stronger underlying demand following the weather-impacted first half," it said.
Total sales for the first nine months of the year rose to EUR14 billion, from EUR13.4 billion in the first nine months of 2013, while earnings before interest, tax, depreciation and amortisation was EUR1.2 billion, up from EUR1.06 billion.
CRH also said its planned EUR1.5 billion to EUR2 billion divestment programme is well underway and it expects to book proceeds from asset sales of about EUR0.4 billion this year.
Cantor Fitzgerald noted that the size of the disposal programme had been cut, with the company's management previously talking about EUR1.5 billion to EUR3.0 billion of disposals.
Net debt stood at EUR3.5 billion at the end of September, down from EUR4.0 billion a year earlier, as CRH focused on managing its working capital and controlling capital expenditure. It said it expects its year-end net debt to be about EUR2.5 billion, down from EUR3.0 billion a year earlier.
CRH said markets remained strong in Switzerland and Poland, and resilient in Ukraine despite the political instability. However, continued economic weakness in the Netherlands and Spain hit volumes and prices in those countries.
Ebitda for the year is expected to be flat in its European materials business, up 50% in its European products business, and flat in the European distribution business.
CRH shares were down 2.8% at 1,346.00 pence Tuesday morning, one of the worst-performing stocks on the FTSE 100.
By Steve McGrath; [email protected]; @stevemcgrath1
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