CRH Forecasts Up to €6.6 Billion in Earnings Amid Rising SCM Demand

Irish construction giant CRH has projected annual earnings of up to €6.6 billion following a robust performance in the second quarter, which saw profits climb by 9%. The company’s chief executive, Jim Mintern, announced that the market for supplementary cementitious materials (SCM) in the United States is expected to double by 2050. This growth potential underscores CRH’s strategic initiatives in a rapidly evolving construction landscape.

CRH, now the largest producer of building materials in the United States, reported a second-quarter adjusted core profit of $2.5 billion (€2.13 billion), surpassing analysts’ expectations of $2.4 billion. The company has adjusted its full-year earnings forecast to a range between $7.5 billion (€6.4 billion) and $7.7 billion (€6.6 billion), an increase from the previous estimate of $7.3 billion to $7.7 billion.

Strategic Acquisition to Boost SCM Capacity

In a move to meet the growing demand for low-carbon construction materials, CRH recently agreed to acquire Eco Material Technologies, a US supplier of SCM, for $2.1 billion (€1.8 billion). This acquisition is set to enhance CRH’s capacity in the US SCM market, which currently stands at 135 million metric tons, by adding approximately 25 million tons to its production capabilities.

Mintern emphasized the significance of this acquisition, stating, “When you look out in the US, we estimate that the SCM market is going to double between now and 2050. This deal puts us right up there in terms of size and leadership levels in the US and gives us a very good growth platform.”

The demand for SCM is driven by the construction industry’s pivot towards sustainable materials, reflecting a broader trend toward reducing carbon emissions.

Positive Outlook Driven by Strong Market Conditions

Mintern attributed the upward adjustment in CRH’s earnings guidance partly to favorable trading conditions in July, a crucial month for the construction sector. He noted a year-on-year increase in both the volume and margins of contracted work across all major US product lines.

The company has established itself as a key player in the North American market, generating approximately 75% of its profits from this region. As the third largest cement manufacturer in both North America and Europe, CRH’s strategic moves are poised to capitalize on the expanding demand for environmentally friendly construction materials.

CRH’s commitment to sustainability and growth positions it well to navigate the evolving landscape of the construction industry, ensuring it remains at the forefront of the market well into the future.