Irish building materials group CRH expects strong growth in the United States to drive an increase in full-year earnings of around 25 percent, and more when a string of recent acquisitions are included.
The world's third-biggest building materials supplier said on Thursday earnings before interest, tax, depreciation and amortization (EBITDA) jumped 34% year-on-year to €1.5bn euros in the first nine months of the year, almost as much as the 1.58 billion made in all of 2014.
Including a forecast €340m euros boost from the €6.5bn acquisition of assets offloaded by the newly merged LafargeHolcim in August, and 200 million euros worth of transaction costs, full-year EBITDA is expected to hit 2.08 billion.
CRH's second-half performance usually accounts for over two-thirds of overall earnings and includes the benefit of positive currency translation impacts this year, the Dublin-based group said.
Earnings for the first nine months of the year were up 55 percent in North America, where an economic recovery is driving construction demand, and 3 percent in Europe where it said the backdrop continued to be mixed but stable.
It said the assets acquired from LafargeHolcim, which include businesses in Europe, Canada, Brazil and the Philippines, were performing in line with its expectations,
Already the leading producer of asphalt and third largest supplier of construction aggregates in the United States prior to the LafargeHolcim deal, CRH also added U.S. glazing products manufacturer CR Laurence for $1.3bn in September.
CRH embarked on its own disposal plan last year, one of the first steps Albert Manifold took as new CEO, and said on Thursday that €1.1bn of the €1.5-2bn worth of net assets identified for sale had been offloaded.
"There are few companies in the building materials sector currently where we have such confidence in our earnings forecasts," Davy Stockbrokers wrote in a note after the "positive" trading update.
"The prospects of structural improvement in margins and returns over time only enhances this view." (Reuters)
Source: www.businessworld.ie
