CRH profit dips on COVID-19 disruption, sees third quarter back in line

DUBLIN (Reuters) - Building supplier CRH CRH.I expects a return to more normal levels of construction to boost third-quarter earnings close to last year's, after on Thursday citing COVID-19 disruption for a 2% drop in first-half earnings.

The world’s second-biggest building materials supplier’s $1.59 billion core earnings in its seasonally less significant first half declined from a record $1.61 billion in 2019 following $65 million of one-off costs primarily related to COVID-19-related restructuring.

Based on recent trading, it expects like-for-like sales in the third quarter to be slightly behind the same period in 2019 but earnings to be line, while limited visibility for the fourth quarter precluded it from providing full-year guidance.

“A fairly robust performance in an extraordinary challenging environment, and really good to see improved profitability and margins, even against a backdrop of lower sales,” CRH Chief Executive Albert Manifold told Reuters in a telephone interview.

The Dublin-based company’s shares were 0.3% higher at 33.5 euros by 0715 GMT.

CRH buoyed investors in its last market update in April by pressing ahead with a 15% hike to its 2019 dividend, despite the new coronavirus, and predicting it would benefit from stimulus measures.

First-half sales were down 1% in its Americas materials division, where CRH is the biggest producer of asphalt for highway construction, but 11% lower in its Europe Materials division, reflecting the differing severity of lockdown measures.

Manifold said the Americas businesses were operating in the region of 90-95% of normalised levels, while activity in Western Europe ranged between 80-90% and was unlikely to return to normalised levels this year.

CRH, which embarked on its first share buyback programme in a decade in 2018 and had indicated before the pandemic that the scheme was likely to continue this year, kept it on pause on Thursday.

It maintained its interim dividend at 22 cents per share.

Reporting by Padraic Halpin; Editing by David Goodman and Barbara Lewis