* CRH warns on profit, sees Europe better in 6-12 months
* Wienerberger sees better H2 in Europe, confirms outlook
* CRH shares down 5.8 pct, Wienerberger down 3.6 pct
(Wraps Wienerberger and CRH results, updates shares, adds
By Georgina Prodhan and Padraic Halpin
VIENNA/DUBLIN, Aug 20 Two major European
building suppliers said on Tuesday they saw only gradual
stabilisation in Europe, disappointing markets that had expected
better news given recent positive economic data.
Wienerberger, the world's largest brickmaker, said
construction activity in its major markets of France, Benelux
and eastern Europe was lagging the United States and Britain,
and Ireland's CRH cut its full-year earnings outlook.
Both said the second half of the year should be better than
the first, which was blighted by a long winter and early summer
floods, resulting in second-quarter earnings that fell short of
expectations at the two companies.
CRH profits missed forecasts and the company said it now
expected second-half core earnings only in line with last
year's, not higher, after identifying extra savings on top of an
already aggressive programme. Wienerberger's 8 percent rise in
operating profit also missed estimates of analysts polled by
Shares in Austria's Wienerberger fell 3.6 percent to 10.98
euros by 0903 GMT, and CRH shares dropped 5.8 percent to 15.83
euros, helping to drag the European construction index
down 2.4 percent in generally weaker markets.
Shares in Wienerberger had risen 25 percent until Monday's
close from a low point in July, when it warned that an expected
rebound had failed to materialise. Over the same period CRH
shares rose 9 percent as some economic gloom receded.
"Wienerberger shares have had a very strong run. In my
opinion, too many hopes were already priced in. Of course they
were also below expectations on the EBIT level," said analyst
Franz Hoerl of Erste Bank.
"There is a recovery but it is still a long way until the
company really earns proper money again."
Last week, Germany and France said their economies had grown
faster than expected in the second quarter, outpacing the United
States and pulling the euro zone out of a
Asked about that data, CRH Chief Financial Officer Maeve
Carton told Reuters: "We can't say we've seen any of the
benefits of that yet... What we have seen is some moderation in
the rate of decline."
"Our sense would be that the markets are going to stay
challenging for the rest of this year," she added, chiming with
Wienerberger's expectation of a "continuing difficult market
environment" for the European brick business this year.
CRH splits its revenues roughly evenly between Europe and
the United States, where it is the leading producer of asphalt
for highway construction. Wienerberger is 90 percent dependent
The United States and Britain are seeing a pickup in
construction of new homes, although that recovery is hampered by
the lack of skilled Mexican labour in the U.S. case and Polish
labour in Britain after an exit during the recession,
Both CRH and Wienerberger expressed cautious optimism about
improvement in their markets in the second half of the year or
early 2014. Wienerberger called for the urgent reinstatement of
public housing projects to stimulate European economies.
CRH Chief Operating Officer Albert Manifold said: "I do
think there's room to be positive going forward. We're seeing
growth in the U.S. and hopefully we'll see a stabilisation in
Europe in the next 6-12 months."
Meantime, CRH identified a further 60 million euros ($80
million) of cost cuts, primarily focused on restructuring and
closing businesses in Europe, on top of the 125 million already
targeted for the year. The company's annual savings through cost
cuts total 2.3 billion euros since 2007.
($1 = 0.7490 euros)
(Editing by Sophie Walker)