Europe / Middle East / Africa
CRH blames euro crisis and weather for tough start to 2012
May, 10 2012
(UK) -- CRH said yesterday that earnings lagged in the four months to the end of April due to a "tough start" to the year at its European operations, which were beset by the effects of cold winter weather.
However, it expects overall like-for-like sales growth this year and has completed €230m worth of acquisitions so far in 2012.
In a trading update ahead of yesterday's annual general meeting, CRH said its US operations had benefited from good weather conditions and a stronger construction market.
Trading in its European operations in the first four months of 2012 has been affected by the severe weather conditions seen in February, as well as the eurozone debt crisis.
Its operations in Ireland, Spain and Portugal are facing challenging market conditions, CRH added.
The CRH board faced a barrage of criticism yesterday from businessmen who alleged that CRH and its subsidiaries have been engaged in anti-competitive behaviour for a long number of years.
Chairman Kieran McGowan, who formally retired his role following yesterday's meeting, denied the allegations. Litigation surrounding a case taken by Sligo businessman Seamus Maye against CRH and firms including Kilsaran and Readymix has been recently winding its way through the courts.
Representatives of the Ireland Palestine Solidarity Campaign voiced their concerns again this year over CRH's 25pc stake in Israeli cement firm Mashev.
The organisation has been calling on CRH for a number of years to sell its holding in the business.
Cement made by Mashev's Nesher unit has ultimately been used to manufacture concrete products that were used to construct a wall that divides the West Bank from Israel. A petition was also delivered to the CRH board during the AGM by the pressure group.
"We'll consider that obviously," said CRH chief executive Myles Lee.
"We respect people's positions. We have a 25pc in a business that produces cement. We're not involved in the manufacture of concrete products there. That business can't discriminate against who it sells to."
Nesher also sells cement to the Palestinian Authority.
CRH also hopes to resolve industrial action at its Irish Cement factories at Platin, Co Meath, and Castlemungret, Co Limerick. The five-week dispute, involving about 100 workers, has halted production at the plants.
Conciliation talks are due to get underway today.
Mr Lee has claimed that a No vote in the upcoming fiscal treaty referendum could send out damaging signals to international investors.
"As we go around our investors, we certainly find Ireland is perceived to be in a much better place than it would have been two years ago in terms of the response to the crisis on a whole pile of fronts and in terms of the export potential of the economy," said Mr Lee, who was speaking following the CRH annual general meeting in Dublin yesterday. The company is Ireland's biggest.
"So I suppose anything that puts that under question again would not be positive internationally for Ireland."
Mr Lee also said that he does not believe a negative outcome of the referendum would position Ireland for a departure from the single currency project, which has been under intense pressure during the financial crisis.
"I don't think the outcome of the referendum will be a catalyst for Ireland exiting the eurozone or anything like that.
"Ireland has been restoring its position internationally over the past couple of years," he said.
By: John Mulligan
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