CRH PLC announced interim results for its second quarter. The company is reporting:
- Sales of €11.9 billion, 1 percent ahead of 2017.
- Like-for-like sales ahead 2 percent; up 1 percent in Europe, up 3 percent in the Americas and down 2 percent in Asia.
”We have had a good first half despite significant weather disruption in Europe and North America in the first quarter,” said Albert Manifold, chief executive. “Construction markets continued to recover and pricing gathered momentum in key European markets while there was solid volume and price growth against a positive economic backdrop in the Americas. Active portfolio management remains an important element of our ongoing strategic focus on capital allocation while integration of our recent acquisitions is progressing as planned.”
Total aggregates volumes, including the impact of acquisitions and divestments, were 9 percent ahead of 2017 and average prices increased by 1 percent; like-for-like volumes increased 4 percent and like-for-like pricing improved 2 percent, supported by more benign weather in the second quarter and solid underlying market demand in the West and South divisions.
After a shortfall in asphalt volumes in the first quarter across most regions, first half total volumes were 2 percent ahead of 2017 and were flat on a like-for-like basis, while total prices increased by 6 percent against a backdrop of higher input costs.
U.S. ready-mixed concrete volumes on a like-for-like basis were 2 percent ahead of 2017, and average prices increased 4 percent, while total volumes including acquisitions were 26 percent ahead. Total sales in its paving and construction services business increased 6 percent, but margin was under pressure.
Energy costs were higher in the first half of the year compared with 2017 with increases in bitumen, diesel and gasoline costs.
The Materials operations in the United States are organized into four divisions: North, South, Central and West.
- Like-for-like sales in the North division were 4 percent ahead of 2017 as aggregates volume recovery in the second quarter supplemented good price increases across all products. Increased energy costs and margin pressure in its construction business resulted in operating profit and margin being behind 2017.
- Like-for-like sales in the South division were 10 percent ahead, as volume and price increases across all products were further aided by an early start to the construction season due to favorable weather in some key states. Cost inflation saw margins under pressure; however, with ongoing performance improvement initiatives, operating profit and margin were ahead of 2017.
- The performance in the Central division was impacted by rainfall and flooding in the second quarter following the colder start to the year, which particularly impacted the construction and asphalt businesses, and like-for-like sales were down 4 percent. Operating profit was also behind, driven by the lower activity and margin pressure.
- The West division delivered a like-for-like sales increase of 12 percent, with strong underlying market demand leading to increased ready mixed concrete and construction sales. Solid margin expansion in both of these business lines led to operating profit increases.
With the completion of the Ash Grove acquisition on June 20, CRH is now a leading cement producer in the United States, with the most significant of its operations across Florida, Texas, the Midwest and the Western states.