Building materials group CRH said the global Covid-19 pandemic is expected to have a material impact on economic and construction activity across its markets this year.
CRH said that due to the unprecedented level of volatility in its markets and the uncertainty around the extent and duration of government restrictions the impact on its profitability cannot be reasonably estimated at this time.
In a trading update today, it also said that in light of the recent market volatility, it has decided to postpone its share buyback programme until further notice.
But the company is still proposing a final cash dividend of €0.63 per share which is due to be approved at its AGM tomorrow. This marks almost 50 years of continuous dividend payments.
In today's statement, CRH said it has suspended all non-essential and discretionary spending, including the reduction of capital expenditure to essential maintenance.
Temporary lay-offs have also been implemented in affected areas, while the leadership team and all board members had taken a 25% salary reduction.
However CRH highlighted its strong financial position with over $6 billion cash and cash equivalents at hand, and reported that its sales rose 3% year-on-year in the first quarter.
"We have seen strong efforts from governments and central banks around the world to mitigate the economic effects of the current crisis, and the construction industry is expected to be among the key beneficiaries of any future stimulus measures," CRH said.
CRH said its operations in Europe have been more impacted than its US operations so far, with nationwide shutdowns being implemented across a number of Western European markets, including Ireland, the UK and France.
It said that with the exception of certain essential activities which are permitted to continue, operations in these markets have been significantly impacted in recent weeks.
However, in the absence of nationwide restrictions on construction activity, its Central and Eastern European businesses have been less impacted so far.
While emergency restrictions have been implemented in all US states, construction has to-date been deemed an "essential activity" in most markets and is permitted to continue, provided appropriate safety measures are implemented.
CRH said its businesses in Pennsylvania, New York City and Washington state have been the most impacted to-date, while our operations in the Southeast, Central and Western US have been less affected.
Albert Manifold, CRH's chief executive, said today that the company had a good start to the year before the outbreak of Covid-19.
"Although the global spread of Covid-19 brings challenges for us all, I have no doubt that with the financial strength of CRH and the experience of our leadership teams, we will endure through these unprecedented and uncertain times," he said.
"All necessary actions are being taken to protect our employees and businesses, and to ensure that we are well positioned for the recovery in our markets," he added.
CRH said it continues to monitor the situation closely and further updates will be provided when visibility improves and it has greater clarity over the expected financial performance of the group in 2020.
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April 22, 2020 at 01:32PM
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Covid-19 to have 'material impact' on CRH operations - RTE.ie
"to have an impact" - Google News
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