Building materials group CRH saw its profit drop 10 per cent in the first half of the year, blaming exchange rates for the €64 million shortfall.
Pre-tax profit for the six months fell to €606 million, compared to €670 million a year earlier. The results were broadly in line with its trading statement released in July, which estimated pre-tax profit would be around €600 million. Earnings per share fell 8 per cent to 85.5 cent.
In Europe, operating profit grew 4 per cent to €515 million. This was mainly driven by a 20 per cent increase in operating profit in the materials division, and offset by a 12 per cent decline in products operating profit and a 3 per cent fall in profits from the distribution unit.
The Americas region fared worse, with operating profit falling 29 per cent year on year to €197 million. Poor weather impacted first-half materials operating profit, which fell 47 per cent, while profits in the products sector fell 12 per cent. Operating profit in distribution rose 10 per cent.
"The outlook for the Americas Materials division appears to have deteriorated over the past number of weeks and full-year guidance is well below our current forecast," Davy Stockbrokers said in a market briefing. " We will likely reduce our full-year 2008 forecasts by 2-3 per cent and our 2009 forecasts by 5-10 per cent."
The company also spent about €700 million on buying up firms in the first half of the year - a reduction on the €2.2 billion spent in the same period a year earlier. The €700 million included a 45 per cent share in Indian cement manufacturer My Home Industries, and the buyout of UK construction
accessories producer Ancon.
CRH also warned of tough trading conditions for the year, saying the weak dollar would have an impact on its outcome for 2008.
"The percentage decline in full year profit before tax is expected to be broadly similar to that reported for the first six months, with a lesser reduction in earnings per share due to the ongoing share buyback and an expected lower percentage tax charge," said CRH's chief executive Liam O'Mahony.
"Against this background, CRH’s geographic, sectoral and product balance, combined with significant cost and commercial initiatives, underpins performance and cash flow."