CRH Plc, the world's second-biggest building materials maker, reported an 8.5-percent fall in first-half profit yesterday and said frozen financial markets and slumping economies will end 15 years of growth.
Net income dropped to 461 million euros (US$677 million) from 504 million euros a year earlier, the Dublin-based company said in a statement. Revenue was little changed at 9.7 billion euros.
The Irish company has cut as much as 6 percent of its work force since the start of last year and has "contingency plans" for more cost reductions, Chief Executive Officer Liam O'Mahony said in an interview.
CRH forecast that full-year pretax profit will fall by about the same amount as the 10-percent drop recorded in the first half, as tighter lending policies from banks stifles demand for homes in Britain and the United States.
The company's stock has slumped 31 percent this year, cutting the firm's market value to 8.78 billion euros. First-half earnings per share declined 7.7 percent to 84.9 cents, beating the median analyst estimate of 84.1 cents in a Bloomberg News survey.
CRH said last month it will fail to post a 16th consecutive year of profit growth in 2008. At the time, the company forecast a "high single digit" decline for the full year.
Rival Martin Marietta Materials Inc, the second-largest US supplier of crushed stone for construction, on August 7 reported a 23-percent decline in second-quarter profit and said full-year earnings would fall short of previous targets.
Vulcan Materials Co, which is the largest American producer of crushed stone, also lowered its full-year earnings estimate earlier this month.
CRH, Ireland's most acquisitive company, invested a record 2.2 billion euros buying companies last year, including the takeover of Swiss rival Getaz Romang and concrete and aggregate plants in Florida and Arizona from Cemex SAB.
The company, which has spent 700 million euros on purchases so far this year, doesn't expect to match last year's total, Finance Director Myles Lee said in an interview.
CRH became the world's No. 2 in construction materials and distribution in 2006, behind Cie de Saint-Gobain SA of France, overtaking Paris-based cement maker Lafarge SA.
The company's Americas Materials unit had a 53-percent drop in operating profit while its Europe Products business fell 12 percent, CRH said yesterday.
