Friday, November 22, 2024

CRH raises guidance on back of infrastructure lift in US, Europe

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It will see the group deliver what will be another set of record annual results.

Releasing second-quarter results on Thursday, CRH said that its adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) jumped 12pc to $2.3bn in the period. That was 5pc ahead of the consensus estimate. They were 13pc higher, at $2.7bn, for the first half of 2024.

Revenue at the group – which generates the majority of its profits in the United States – slipped 1pc in the second quarter to $9.7bn.

CRH said its revenues declined in the second quarter due to unfavourable weather in certain regions, and divestitures that primarily included phase one and two of its European lime operations.

“We are pleased to report another period of further profit growth and margin expansion for CRH,” said CRH chief executive Albert Manifold.

He added that the execution of CRH’s “differentiated solutions strategy” continues to deliver “a robust financial performance” for the group. Mr Manifold said CRH is also continuing to be disciplined in how it allocates capital.

“Reflecting the strength of our financial performance, the positive underlying momentum in our business as well as the positive contribution from recent portfolio activity, we are raising our guidance and remain well positioned to deliver another record year in 2024,” he added.

CRH now expects to post net income of between $3.7bn and $3.85bn for the year. It anticipates that adjusted Ebitda will be between $6.82bn and $7.02bn.

The upgrades – by about 3pc at the midpoint – come as peers are cutting their earnings expectations.

“Our operations in North America are expected to benefit from significant infrastructure activity and increased investment in key non-residential segments, while in Europe, we expect good underlying demand in infrastructure and key non-residential markets, further supported by disciplined cost control,” it told investors. “Residential construction, particularly new-build activity, is expected to remain subdued across our markets in the near term.”

In the three months to June, CRH completed eight acquisitions for a total consideration of $400m compared with none in the second quarter of 2023.

Americas Materials Solutions completed five acquisitions, Europe Materials Solutions completed two acquisitions, while Americas Building Solutions completed one acquisition.

Overall, for the six months ended in June, CRH completed 16 acquisitions for a total consideration of $2.6bn, compared with $200m in the first half of the prior year.

The largest acquisition, which was completed in the first quarter of 2024, was a portfolio of cement and ready-mixed concrete assets and operations in Texas by Americas Materials Solutions for a total consideration of $2.1bn.

On July 1 this year, CRH completed the acquisition of a majority stake in Adbri, a company with leading market positions in Australia that complements CRH’s core competencies in cement, concrete and aggregates and creates additional opportunities for growth and development for CRH’s existing Australian business.

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