CRH shares declined as much as 7.5 percent, the biggest fall since November, to 14.35 euros. Second-half like-for-like European sales will decline more than the 5 percent drop in the first half and growth on that basis in the Americas will be “well below” the 8 percent posted in the first six months, the building materials company said today.
CRH said it is advancing a cost-cutting program in response to “continued weakness in key European markets.” Euro-area construction output fell 8.4 percent in May from a year earlier, its fifth consecutive drop, according to Eurostat. Germany’s HeidelbergCement AG (HEI) said last month it planned to improve profitability with two cost-cutting initiatives.
“Overall, we see realities of the sector catching up with CRH,” Ian Osburn, an analyst at ING, said in a note. “Management outlook becomes much more bearish.”
The stock was down 7.1 percent at 14.42 euros at 3:02 p.m. The shares have fallen 6.2 percent this year, giving the company a market value of 10.4 billion euros ($12.8 billion).
CRH’s cost-reduction programs saved 50 million euros in the first half of the year, bringing cumulative annualized savings to 2.1 billion euros since 2007, the company said today.
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