A write-down in the value of a Spanish investment it plans to exit contributed to a fall in earnings and profits at building materials group CRH last year.
The group said yesterday it is swapping its 26 per cent stake in Spanish cement producer, Uniland, for full ownership of a Bilboa-based manufacturer, Cementos Lemona.
The deal, involving assets valued at about €140 million, will end a long-running legal row between CRH and Uniland’s majority owner, Cementos Portland Vallderrivas (CPV).
CRH, Ireland’s biggest company, said pre-tax profits fell 5 per cent last year to €674 million from €711 million in 2011.
Revenue grew 3 per cent to €18.7 billion in 2012 from €18 billion the previous year, largely on the back of an improved performance in the US, which helped to counteract a decline in Europe.
Earnings before interest, tax, depreciation and amortisation – a measure of the cash a business generates – were down 1 per cent at €1.64 billion from €1.656 billion. Basic earnings per share were 76.5 cent, down from 82.6 cent in 2011.
However, earnings were ahead of the group’s own guidance, issued last November, which predicted that they would come in at €1.6 billion.
Impairment charges
The falls in profits and earnings were due in part to a sharp rise in impairment charges to €174 million from €32 million.The biggest contributor to this was a €146 million write-down in the value of Uniland to €143 million.
The group also announced yesterday that chief executive Myles Lee will retire from CRH at the end of this year, after completing five years at the helm.
Mr Lee turns 60 this year, the normal retirement age for his role. He has been an exective director of the group for 10 years and worked there since 1982.
Sales in the Americas division advanced 15 per cent, but European sales fell 7 per cent. Mr Lee said: “European businesses had to contend with weakening consumer and investor confidence within the Eurozone.”
Operating profits fell 3 per cent to €845 million. The dividend will be maintained at 62.5 cent. CRH spent €256 million in the first half of 2012 on 18 acquisitions and investments. It stepped this up in the second half to €390 million. It sold assets worth €859 million during the year, including its 49 per cent stake in Portuguese cement producer Secil and Magnetic Autocontrol business.
Looking ahead, “assuming no major financial or energy market dislocations”, Mr Lee said that the group expects ongoing improvements in its American businesses and will take further initiatives to counteract pressures in its European operations.
