CRH says sales decline is slowing

Building materials group CRH said the rate of decline in its sales moderated in the third quarter of the year, a trend it expects to continue into the final quarter of the year.

In an interim management statement this morning, the group said like-for-like sales fell 4 per cent in the three-month period, compared to a 10 per cent recorded in the first half of the year. In the nine months to the end of September, underlying sales at CRH have fallen 8 per cent.

In its Europe materials operations, sales fell 5 per cent on a like-for-like basis for the quarter. Its products division in the region, meanwhile, saw an improving trend in like-for-like sales continue in the third quarter, resulting in a decline of only 1 per cent. This compares with a 10 per cent fall in the first half of the year.

CRH said its Americas business was also seeing a moderation in sales decline, and expects it to record a full year EBITDA of $1 billion, compared to $1.23 billion in 2009.

The rate of profit decline at the CRH group also eased in the third quarter, as the group’s ongoing cost reduction measures also had an impact. Earnings before interest, tax, depreciation and amortisation (EBITDA) for the third quarter of 2010 were €700 million, compared with €750 million in 2009.

For the full year, the company is predicting EBITDA of approximately €1.6 billion for the year, with €400 million for the final quarter of 2010. Profit on disposals for this year are expected to be more than double last year's figure, while net finance costs are also predicted to double.

"Accordingly, we anticipate that full-year pre-tax profit before impairment charges will be in the range €620 million to €650 million," the company said.

CRH also announced today that it plans to buy a further 50 per cent of German-based distribution business Bauking for a total consideration of €126 million, bringing its total share of the company to 98 per cent.

"This transaction will bring our total German distribution sales to €850 million in a fragmented market with significant expansion potential," said CRH chief executive Myles Lee.

Shares in the company rose 5 per cent on the Dublin market to €14.55 by 3.45pm.