Building materials group CRH told shareholders yesterday that it had enjoyed a positive start to the year, but made it clear that its European markets were still depressed.
In a statement to the company's annual general meeting, CRH chairman Mr Pat Molloy said the company continued to face risks and uncertainties.
He pointed out that economic growth in Europe, responsible for half the group's €11 billion sales, was subdued. But, he added that the US, which generated the rest of its revenues, was improving.
"Overall, we have enjoyed a positive start to the year. Our 2003 acquisitions are meeting expectations and we face the seasonally more profitable second half of the year with confidence," he said.
Mr Molloy said CRH's European building materials division got off to a better start than last year, when sales were hit by weather. He added that Poland had been particularly strong ahead of a May 1st VAT increase on building materials.
Demand in its European products and distribution division was subdued, but contributions from acquisitions in 2003 had boosted the operation's performance. CRH spent €1.6 billion on acquisitions last year.
This year, it has spent €400 million to date, a figure expected to exceed €600 million once it gets regulatory approval for its offer to buy 49 per cent of Portuguese cement producer Secil, which is expected by mid-year.
CRH's North American materials division is meeting expectations. The US Congress recently approved a 7 per cent increase in its budget for the federal highway programme, while talks continue on the renewal of a federal highway construction programme.
The improved performance of its US products and distribution businesses in late 2003 has continued, according to Mr Molloy.
One shareholder questioned the appropriateness of CRH maintaining its 25 per cent stake in Israel's only indigenous cement producer, Nesher, whose output could be used in constructing the wall the Israeli government is building in the West Bank.
Mr Molloy said Nesher was only involved in the manufacture of cement, a raw material.
"We cannot determine where it is going and how it is going be used downstream," he said.
The meeting announced the retirement of directors, Mr Don Godson, CRH chief executive from 1994-1999, and Mr Howard Kilroy.
