Building decline blamed for fall in quarry profits
Irish construction and quarrying giant CRH yesterday announced a 55% drop in profits for 2009 and forecast that key markets would remain difficult this year.
In its full year results filing the company posted pre-tax profits of €732m, down from €1.6bn the previous year.
CRH blamed the decline in residential and non-residential construction markets in Europe and the US for the fall.
The company owns Northstone, Tyrone Brick and Springvale EPS in Northern Ireland but did not provide a breakdown of how each of its subsidiaries had performed individually.
However, it said that construction activity in the Irish market had fallen steeply during the year and cement volumes were down 45% on 2008 levels.
The residential and commercial sectors in Ireland reduced further, and the overall decline in sales volumes, together with the impact of the rationalisation costs, resulted in lower margins and an operating loss, the company said.
Chief executive Myles Lee said: “Residential and non-residential markets declined during 2009 in both Europe and the US, with government-funded infrastructure investment only partially compensating.
“We expect a difficult demand backdrop through much of 2010 with continuing declines in non-residential activity across our markets not helped by a poor start to the year as a result of prolonged severe weather in Europe and North America during January and February.”
Mr Lee said cuts to the company’s cost base over the past three years and ongoing restructuring measures had strengthened the group and positioned it well to respond to any increased demand that might develop as well as acquisition opportunities that might arise. CRH said that in Europe concerns remained about fiscal deficits in a number of countries, although some markets had proved resilient.
For example in Poland, which has weathered the economic downturn better than many other European countries, the firm said its operations are well-placed to benefit from infrastructure-driven growth in 2010.
However, it added that expectations in the US residential construction market have fallen short of predictions and the likely timing of recovery in activity remains unclear.