CRH says tougher trading to hit profit in 2008

By Jonathan Saul

DUBLIN (Reuters) - CRH (CRH.I) expects profits to drop this year as the global economic downturn and slowing demand take their toll on the Irish building materials group.

CRH (CRH.L), one of the world's biggest suppliers to builders, posted a 10 percent drop in first half pre-tax profit on Tuesday after warning last month of an end to years of uninterrupted earnings.

"Following 15 years of consecutive growth and a record performance in 2007, more difficult trading conditions and a weaker US dollar will, as previously indicated, result in a lower outcome for 2008," Chief Executive Liam O'Mahony said.

The drop in earnings per share would be less due to a share buyback programme and an expected lower tax charge, CRH said.

O'Mahony said the group was "a touch more cautious" in its outlook since July given concerns about the ongoing impact of the credit crunch and the poor global macroeconomic outlook.

"There is significant uncertainty out there beyond our control," O'Mahony told an analyst call. "The business is performing, I think, in the circumstances reasonably well."

Pre-tax profit to for the first-half to end June fell to 606 million euros (481.8 million pounds). CRH had said in July it expected a first-half pre-tax profit of around 600 million euros.

"The percentage decline in full-year profit before tax is expected to be broadly similar to that reported for the first six months," said O'Mahony, who retires at the end of 2008.