CRH profit to fall 55% in 2009

Building materials firm CRH said today profits would fall 55 per cent in 2009 compared with the previous year as the outlook for recovery remained unclear.

Profit before tax for the year will slip to €750 million before asset impairment charges, the firm said.

CRH said that although news on economic developments and financial markets over recent months has been more positive, trading conditions remain difficult and the timing of any sustained pick-up in developed world construction demand is unclear.

However, the rate of decline in profit before tax eased during the second half of 2009, the company said, as cost cutting measures and more moderate energy-related input costs had an impact. The firm also said its cost savings would be more than previously expected.

CRH said it would deliver full-year 2009 EBITDA close to €1.8 billion, compared to €2.66 billion in 2008, a decline of about one third.

The company said group sales fell 18 per cent on a like-for-like basis during the second half of 2009, compared with a 21 per cent decline in the first half of the year.

The measures are expected to deliver total annualised gross savings of about €1.65 billion over the period 2007 to 2010 with total costs to implement of €305 million.

"This represents an increase of €200 million in savings and €55 million in implementation costs on the €1.45 billion of savings and €250 million of implementation costs announced in July 2009," the firm said in a statement this morning.

CRH said 40 per cent of the total gross savings will be permanent.

In Europe, EBITDA is expected to fall 40 per cent for the year, with materials down 45 per cent and products seeing a 30 per cent decline. The impact of the weaker Polish Zloty and Ukrainian Hryvnia also impacted results.

The group's overall Americas market is expected to fall about 30 per cent in EBITDA compared with last year’s $1.7 billion, or 25 per cent in euro terms.

The company said its development activity was focusing on acquisition opportunities that offer "compelling value and exceptional strategic fit".

Capital expenditure for the year was €500 million, the firm said, about half of 2008's €1.04 billion.