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CRH earnings up as Trump infrastructure boost seen in medium term
March 1, 2017 / 8:49 AM / 9 months ago

CRH earnings up as Trump infrastructure boost seen in medium term

* Shares up almost 3 percent as FY earnings top 3.1 bln eur

* “Significant firepower” for deals as net debt tumbles-CEO

* Sees Trump infrastructure boost emerging in medium term

By Padraic Halpin

DUBLIN, March 1 (Reuters) - Strong earnings growth and cash generation last year drove shares in building materials group CRH higher on Wednesday as it awaited a further, medium-term boost to infrastructure under U.S. President Donald Trump.

Ireland’s CRH is the United States’ biggest producer of asphalt for highway construction and third biggest supplier of readymixed concrete and construction aggregates. North America accounted for 60 percent of its full-year earnings last year.

In his first Congressional address on Tuesday, Trump repeated a campaign promise of a $1 trillion infrastructure programme but gave few specifics other than to say it would be financed through both public and private channels.

“There’s really a long tail on these, so whatever may evolve with regard to future infrastructure spending, that’s going to evolve more in the medium term than the short term,” CRH Chief Executive Albert Manifold told Reuters in a telephone interview.

“We are the largest buildings materials business in North America so we’re well positioned to benefit in any uplift.”

CRH’s shares, which jumped to a nine-year high the day after the U.S. election last November, were up 2.9 percent at 2,800 pence by 0825 GMT after it beat its net debt and earnings forecasts for 2016.

The world’s third-biggest building group’s core earnings, or earnings before interest, tax, depreciation and amortisation (EBITDA), rose 10 percent year-on-year on a pro-forma basis to 3.13 billion euros ($3.30 billion). It had forecast that full year earnings would be “in excess of” 3 billion euros.

That helped push its net debt to 1.7 times EBITDA, well below a goal to reduce it to less than 2-times by year-end. Davy Stockbrokers said such strong cash generation best placed it among the sector to pursue further acquisitions.

CRH, transformed by a 6.5 billion euro acquisition of assets from rivals Lafarge and Holcim in 2014, has already doubled last year’s spend by dishing out 500 million euros on eight transactions since January, all in North America where it sees continued momentum in construction. ($1 = 0.9494 euros) (Editing by Louise Heavens)

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