CRH buys $2bn cement plants in Texas and raises profit outlook
Albert Manifold, group chief executive at CRH, at the New York Stock Exchange in September, when the switch from the the Euronext exchange in Dublin was completed.
CRH has announced a $2.1bn (€1.9bn) acquisition of building materials assets in the high-growth Texas market from US rival Martin Marietta Materials and upgraded its full-year core profit guidance.
CRH, the largest building materials producer in the US and Europe, said the assets comprised a 2.1 metric ton capacity cement plant, a network of terminals and 20 ready-mixed concrete plants which are expected to generate pro-forma 2023 core profit of around $170m.
Martin Marietta chief executive, Ward Nye, said in a statement that the group believed that monetising these operations was in the company's best interests to maximise near-, medium- and long-term stakeholder value. The deal is due to close in the first half of next year.
CRH, which makes about 75% of its profits in the US, said in a trading update that it expects full-year earnings before interest, tax, depreciation and amortisation of $6.3bn. That compares with the $6.2bn it had forecast in August. That would amount to a 13% rise on the record $5.6bn reported last year and follows a 14% year-on-year increase in the third quarter and so far this year.
Third-quarter profit was up by a double-digit percentage in all but one of CRH's four divisions, including a 33% jump in Europe Materials Solutions, where it said higher prices more than offset the impact of lower activity levels due to subdued residential demand.
Slower residential markets led to a 16% fall in core profit in its Europe Building Solutions division. While the Dublin-based group said new-build residential construction is set to remain subdued in 2024, it expects positive pricing momentum to continue.
Significant public investment in infrastructure and increased "reshoring" of critical supply chain manufacturing should also ensure resilient underlying demand across key end-use markets in North America and Europe, it added.
CRH was among the one of the longstanding fixtures and the most valuable company listed on the Dublin stock market.
However, shareholders in the Irish building supply company overwhelmingly voted to move the company’s primary stock exchange to New York from London, and remove it completely from the Euronext exchange in Dublin. The switch was completed in September.
It said at the time it expected the US to be the “key driver of future growth”, helped by the “unprecedented levels of infrastructure funding” that president Joe Biden has pledged to invest in the dilapidated public projects there.
