27th Apr 2016 12:14
LONDON (Alliance News) - Irish building materials company CRH PLC on Wednesday said a robust trading environment in its key markets drove revenue higher in the first quarter, particularly in the Americas, where growth looks set to continue as federal funding increases.
The FTSE 100-listed group said sales grew 9.0% year-on-year in the first quarter, with sales in the Americas rising 22%, Asia sales up 12% and Europe sales flat.
CRH said it benefited from good weather conditions in the first months of 2016, which particularly helped sales in its Americas business, driving up activity in the typically low-volume first quarter.
Asphalt volumes were also strongly ahead in the US, although CRH said prices reduced due to the continued low input cost environment. However, its markedly seasonal business, Americas Materials, typically sells less than 10% of annual asphalt volumes and approximately 20% of aggregates and ready mixed concrete volumes in the first quarter of the year. Sales for this business in the first quarter were 27% ahead of proforma 2015.
Market conditions in Europe continued to stabilise in the quarter, CRH said, albeit with variations in different regions. In the UK, the demand environment was "mixed", with cement volumes ahead of 2015 but aggregates slightly down, whilst in Switzerland, CRH said there were improved volumes but the pricing environment remains competitive.
Asian sales were helped by good cement demand in the Philippines, supported by strong foreign direct investment in the business process outsourcing sector, overseas workers' remittances and increasing government infrastructure spend.
CRH said it expects its group earnings before interest, taxation, depreciation and amortisation for the first half to be around EUR1.0 billion, with more progress on earnings expected in the second half.
The company added that it expects construction demand to continue to grow in the US in the second half of the year at a "modest pace". CRH noted that funding for US infrastructure is expected to increase "moderately with improving State finances", as well as the passing of a new federal programme, the FAST act.
This act, passed in Congress on December 4, focused on the transport infrastructure in the US and will provide further funding for construction projects.
CRH added that it expects results in the Philippines to be ahead of the second half of 2015.
CRH will publish interim results on August 25.
Shares in CRH were up 1.3% at 2,039.00 pence on Wednesday.
By Hannah Boland; [email protected]; @Hannaheboland
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