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CRH sees more profit growth after beating 2023 target
CRH sees more profit growth after beating 2023 target By Reuters
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Published Feb 29, 2024 09:03AM ET
Updated Feb 29, 2024 09:08AM ET
© Reuters.
By Padraic Halpin
DUBLIN (Reuters) – CRH (NYSE:CRH) shares jumped 7% on Thursday after the largest building materials producer in the United States and Europe topped its guidance with core profit growth of 15% in 2023 and forecast growth of up to 10.5% in 2024.
The Dublin-based group, which makes about 75% of its profits in the United States, expects full-year adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of between $6.55 billion and $6.85 billion this year.
It reported adjusted EBITDA of $6.2 billion for 2023, or $6.5 billion using the International Financial Reporting Standards, which was ahead of its guidance of $6.3 billion under IFRS in November after good weather allowed it to clear some of its backlogs of work.
CRH has transitioned to the U.S. GAAP reporting standard as part of its move to the New York Stock Exchange last September.
The shares gained 6% premarket in New York, while its shares listed in London were 7.3% higher.
The company’s EBITDA margin increased by 120 basis points to 17.7% after it implemented double-digit percentage price increases of up to 18% in many of its key materials across the United States and Europe.
CRH expects another year of double-digit percentage price growth in U.S. aggregates and cement, Chief Financial Officer Jim Mintern told Reuters, with further increases also expected in Europe, where it is still recovering from an unprecedented rise in energy costs during 2022.
Mintern said he expected raw material, sub-contracting and labour costs to drive a mid-single digit percentage increase in input costs this year, an easing on 2022 and 2023.
CRH said it expects the price increases to come in tandem with a favourable market backdrop, boosted by significant infrastructure investment and increased “reshoring” of manufacturing activity across its two main markets.
“The basis of the CRH investment case is not changing but it is accelerating,” Davy Stockbrokers analyst Ross Harvey wrote in a note.
CRH sees more profit growth after beating 2023 target
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