* CEO to retire at end of 2013
* FY operating profit falls 3 pct to 855 mln euros
* EBITDA down 1 pct to 1.64 bln euros
* COO says U.S. markets improving, euro zone still tough
By Stephen Mangan
DUBLIN, Feb 26 Ireland's CRH said an
upswing in the United States will drive growth this year and
offset the slump in euro zone markets that pushed pretax profit
down five percent in 2012.
Profit before tax at CRH, one of the world's largest
building materials providers, fell to 674 million euros we weak
consumer and investor confidence continued to hurt its European
But in the United States, where it is the main producer of
asphalt for highway construction and like-for-like sales rose 3
percent last year, CRH said the outlook was promising and should
trump euro zone woes.
"There are two contrasting fortunes between Europe and the
U.S., but there's now light at the end of the tunnel in our U.S.
operations," CRH chief operating officer Albert Manifold told
Reuters in a telephone interview.
"Despite headwinds in Europe we do think that the result of
the U.S. operations in 2013 will outweigh any of the negative
factors so we think we're going to see a year of progress."
Infrastructure projects in the United States were hit by a
tightening of state spending and a rise in bitumen costs, a key
raw material, but there are now strong signs of recovery in
residential and non-residential markets, said Manifold.
Full-year earnings before interest, taxes, depreciation and
amortisation (EBITDA) of 1.64 billion euros were 2 percent ahead
of analyst forecasts and also better than CRH's latest guidance
TOUGH EURO ZONE
Dublin-based CRH has weathered the downturn in global
construction better than many of its peers by cutting costs
aggressively and early, and it delivered 166 million euros of
savings last year ahead of an 150 million target.
It said it would cut a further 300 million euros by the end
of 2015 - on top of the 2.2 billion euros already implemented -
through a number of measures including a reduction in staff and
further pooling of back office resources.
Hopes the euro zone might emerge from recession soon were
dealt a blow on Friday when the European Commission said it will
not return to growth until 2014.
The building sector, already facing the collapse of housing
markets in Spain and other crisis-hit euro zone states, is a
leading indicator of whether European companies are committing
to the investment needed to prevent an extended downturn.
"The overall market situation in Europe in going to be very
difficult for 2013," said Manifold. "We don't see any short term
end to the current crisis."
CRH also said chief executive Myles Lee would retire at the
end of 2013, following completion of a five-year term at the
helm and a career spanning nearly 30 years.
Shares in CRH were up 0.65 percent at 16.3 euros at 12.30
GMT, which values the group at approximately 11.7 billion euros.
"The direction of operating earnings is positive for the
first time in a while for CRH," said Barry Dixon, analyst at
"If this momentum continues, the stock will soon grow."