CRH’s acquisition spending nears €500mn

723 CRH looks to be heading for €500 million in acquisition spending in the year to date, and the group said yesterday that it is targeting Russia and south-east Asia for further expansion

CRH said that it has spent approximately €385 million on 15 acquisitions and investments in a statement published at its annual meeting in Dublin, having recently agreeing to buy Mykolaiv Cement in Ukraine for €96 million. This makes CRH the biggest player in the industry in the eastern European country.

Chief executive Myles Lee confirmed that the Mykolaiv deal would bring spending close to €500 million for the year so far, but acknowledged that the transaction may not be completed until the second half of the year.

The company also took over Cementos Lemona in Spain as part of a settlement of a dispute that saw it transfer its 26% stake in Iberian cement producer Uniland to 939 Cementos Portland Valderrivas. Including this swap, the group has gained €180 million on disposals so far this year.

CRH has opened an office in Singapore and is looking at south-east Asia including countries such as Indonesia where there is strong growth, for possible acquisition targets. It already has stakes in businesses in China and India.

Lee said that it is looking specifically at the area of Russia west of the Urals for possible expansion opportunities having had had an office in Moscow for the last 18 months.

Responding to a number of speakers, who raised the fact that the Polish authorities fined CRH’s local subsidiary Grupa Ozarów €25 million in 2009 for anti-competitive practices, chairman Nicky Hartery said that its appeal against this is due to be heard at the end of the year.

It is defending separate actions in the Irish courts from rivals Goode Concrete and Framus, both of whom allege that it was involved in various anti-competitive practices, including price-fixing, in the Republic. CRH has denied these claims. Mr Lee said that he could not comment on either case.

In an interim management statement published ahead of the annual meeting, CRH said that as a result of bad weather on either side of the Atlantic, which hit building activity in its main European and US markets, earnings for the first half of the year will be €400 million, 16% less than the €480 million it reported for the first half of last year.

However, it added that assuming a return to more normal weather patterns, earnings in the second half are likely to be ahead of the €1.04 recorded during that period in 2012.