Building materials group CRH said today that a better than expected performance in the second half of 2003 will restore profits to 2002 levels but the weak dollar will have a negative impact on profits.
CRH said first-half activity was affected by exceptionally bad weather in Europe and the United States. However the second half saw substantial recovery as well as continued strong residential construction in Ireland.
The company spent approximately €1.6 billion on acquisitions and investments during 2003 with the European Products & Distribution Division enjoying particular success.
But CRH warned that the ongoing decline of the US dollar will have a significant negative impact on the translation into euros of US operating profits.
The full year average US$/euro exchange rate for 2003 was $1.1312 compared to
$0.9456 in 2002 . This results in an adverse translation impact of €86 million equivalent to approximately 10% of 2002's profit before tax level of €856 million.
In Ireland CRH said a very strong housing sector, with an estimated record 65,000 house completions compared with 57,700 in 2002, resulted in strong demand for cement and concrete products. Road construction work under the National Development Plan was strong in the first half but weakened
in the second half due to a decline in new start-up work .
The Irish commercial and industrial sectors had another poor year with an overhang of office and industrial buildings continuing to curtail new-build.
CRH gave a confident assessment of its prospects for the year ahead
and added that its ongoing strong cash flow
should allow the company to take advantage of any acquisition opportunities as they arise and. "We face 2004 with confidence despite the current uncertainties in economies and currency markets," the company concluded.