First-half profit to be down 10% on 2007, with a similar fall likely for the full year
International materials group CRH has warned of a 10% fall in profits for the first half of 2008, compared with the same period a year earlier.
In a trading statement for the six months ended 30 June 2008, the firm predicted first-half 2008 pre-tax profit tax of around £480m (€600m), down from £533m (€670m) for the first half of 2007.
It attributed £16m (€20m) of the reduction in profit to an “adverse translation effect” from a weaker dollar.
CRH also warned that it expects full-year pre-tax profit for 2008 to show a fall “in the high single digits” from 2007’s figure of £1.5bn (€1.9bn), including a £64m (€80m) adverse translation effect.
However, in Europe, CRH expects operating profit for the first half of 2008 to increase by around 5% on the £394m (€495m) reported in the first half of 2007.
This rise is forecast on the back of strong trading in central and eastern Europe and contributions from new acquisitions outweighing declines in Ireland, the UK and Spain. The firm spent around £555m (€700m) on acquisitions in total during the period.
Operating profit in the Americas, however, is forecast to fall to around £150m ($300m), with the decline from £185m ($367m) a year earlier attributed to exceptionally wet weather in May and June.
In a statement, CRH said: “The ongoing negative economic developments and financial market pressures of recent months are having an impact on business sentiment leading to weaker demand. Against this background, CRH’s geographic, sectoral and product balance continues to underpin performance and cash flow.
“We have implemented significant cost reduction measures over the past 18 months and, as we move into the more important second half, we have intensified our emphasis on operational efficiency and commercial delivery across our businesses.”
Full interim results for 2008 to be announced on 26 August.