Building materials company CRH has forecast earnings and profit margin for the first half of 2022 to be ahead of the same period last year after making a "positive start to the year".
The Irish-headquartered group saw "good underlying demand" during the first quarter, with sales earnings and margin all improving versus the first three months of 2021 amid "improved activity levels" and the execution of its integrated solutions strategy.
"The continued delivery of our solutions strategy resulted in a good start to the year," said Albert Manifold, chief executive of CRH. "Although a number of challenges and uncertainties continue, our demand backdrop remains favourable and absent any major dislocations in the macroeconomic environment, we expect first-half sales, EBITDA and margin to be ahead of the prior year period."
Looking ahead, CRH said its expects to exceed the €1.85bn profit it made in the first half of last year, assuming normal seasonal weather patterns and any further disruption in the macroeconomic environment, with strong demand in North America.
Rising energy costs and the war in Ukraine present challenges for CRH's Europe materials business, and the company has forecast like-for-like earnings for H1 compared to a year ago.
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Overall, reported (+15%) and like-for-like (+13%) sales are both significantly improved year-on-year, with increases recorded across the board, in its Americas materials (+13% and +9%), Europe materials (+11% and +18%) and building products (+22% and +12%) divisions.
In Ireland and the UK, sales were "well ahead" of the prior year, reflecting good underlying demand and mild weather conditions, and price increases were implemented across all products.
"Our businesses in Ireland had a positive start to the year with volume increases in all key products against a prior year comparative impacted by Covid-19 restrictions," CRH said.
Activity was stronger in Poland, Romania, and Ukraine prior to the war, and business also improved across Finland, Germany, Switzerland, France, the Benelux region, Denmark and Spain, again despite price increases, although sales in the Philippines were down.
In the Americas, aggregates volumes were down 3% due to adverse weather across the US; asphalt sales volumes rose 19%; ready-mixed concrete volumes fell 6% due to poor weather; paving and construction services volumes rose 29% on the back of a number of large products in the west, and cement volumes were stable, with prices charged all increasing.
CRH is continuing with its share buyback programme, with a further $300m worth of shares to be acquired from shareholders by the end of June, bringing the total value of share repurchased by the company this year to $600m.
The group has spent $600m on 11 acquisitions to date this year, the largest of which was the buyout of Rinker Materials, expanding its pipe and precast business in Texas and the acquisition of outdoor architecture business Calstone Company in California.
"Overall, assuming normal seasonal weather patterns and absent any major dislocations in the macroeconomic environment, we expect group sales, EBITDA and margin for the first half of the year to be ahead of 2021," CRH said.
"We expect the positive demand environment in North America to continue, which, in addition to the continued delivery of our integrated solutions strategy and good commercial management, should positively impact both our Americas materials and building products businesses.
"Despite the challenges of significant energy cost volatility and the ongoing conflict in Ukraine, we expect like-for-like EBITDA in our Europe materials business to be ahead of the prior year period."
Photo: Albert Manifold at the CRH Annual General Meeting in the Royal Marine Hotel in Dun Laoghaire in 2018. (Pic: Sam Boal/RollingNews.ie)
