Cold weather hits CRH sales

Building materials group CRH said today that its earnings four the first four months of 2012 have been significantly affected by weak trading at its European operations.

The company said severe weather conditions across continental Europe had led to a like-for like-sales decline of 6 per cent for January and February.

CRH said the rate of decline had moderated in subsequent months to leave cumulative like-for-like sales to end of April down 4 per cent compared to the same period in 2011.

CRH said that overall, like for like sales to the end of April were up 2 per cent head of last year, although earnings before interest, taxes, depreciation, and amortisation (ebitda) were behind 2011 levels

Its European material division was particularly affected by the extreme weather with operations in Poland, Switzerland, Benelux and Turkey all performing below expectations.

The group said that while volumes in Poland have since recovered and are back in line with last year, volumes elsewhere have remained behind those reported last year.

In Ukraine, volumes for the first four months were well ahead of last year, while January-April volumes in Finland were somewhat behind the same period in 2011.

Operations in countries experiencing austerity measures - Ireland, Portugal and Spain - "continued to face challenging market conditions," the group said.

Overall, cumulative like-for-like sales for the European materials division were slightly ahead of the first four months of 2011.

CRH's products division was also impacted by weather conditions with like-for-like sales down 8 per cent in the first two months of the year. The group said the subsequent recovery in March and April had been strong in Germany and Denmark but more muted in Benelux, France and Switzerland where weaker government expenditure and consumer confidence has dampened demand.

Overall, underlying sales for the first four months of 2012 were 5 per cent behind 2011, the group said.

Like-for-like sales for the group's European distribution division was down 8 per cent for the first two months of 2012 and by the end of April were approximately 6 per cent behind 2011.

The group said that its operations in the Americas had benefited from favourable early weather conditions and a firmer tone in construction markets in the US.

Like-for-like sales for its Americas operations rose 11 per cent in the first four months of the year.

CRH said it expected overall ebitda for the first half of 2012 to be close to last year’s €574 million.

"With incrementally more positive US economic and construction prospects for 2012 mitigating a more cautious view on the outlook in Europe, we continue to expect overall like-for-like sales growth in 2012 and a year of progress for CRH," it said.