Reporting by Padraic Halpin; Editing by Kirsten Donovan
DUBLIN, Nov 21 (Reuters) – CRH (CRH.N) announced a $2.1 billion acquisition of building materials assets in the high-growth Texas market from U.S. rival Martin Marietta Materials (MLM.N) on Tuesday and upgraded its full year core profit guidance.
CRH, the largest building materials producer in the United States and Europe, said the assets comprised a 2.1 metric ton capacity cement plant, a network of terminals and 20 readymixed concrete plants which are expected to generate pro-forma 2023 core profit of around $170 million.
Martin Marietta CEO Ward Nye said in a statement that the group believed that monetising these operations was in the company’s best interests to maximize 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 U.S., said in a trading update that it expects full-year earnings before interest, tax, depreciation and amortisation (EBITDA) of $6.3 billion versus the $6.2 billion forecast in August.
That would amount to a 13% rise on the record $5.6 billion reported last year and follows a 14% year-on-year increase both 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 Europe Building Solutions.
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.
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