CRH sees big U.S. infrastructure boost regardless of Trump plans

By Padraic Halpin

DUBLIN, Nov 17 (Reuters) - Building materials group CRH expects to benefit from an increase in infrastructure spending in the United States even without president-elect Donald Trump's plans for a major boost, its chief executive said on Thursday.

CRH (EUREX: 558474.EX - news) is the United States' biggest producer of asphalt for highway construction and third biggest supplier of readymixed concrete and construction aggregates, and the region accounts for more than half of its total earnings.

Trump, who last week defeated Democrat rival Hillary Clinton in the U.S. presidential election, wants to introduce a $1 trillion package of infrastructure spending to boost the economy, relying on private sector investment.

But CRH Chief Executive Albert Manifold said the U.S. election also had 22 separate state votes to increase funding on transport and infrastructure, 70 percent of which passed. This was "the really big news" for CRH, Manifold said, estimating they would add an extra $40 billion in funding.

"Up to last Tuesday, overall infrastructure spending over the next five years was going to increase by 13 percent. After Tuesday, there is now a very significant uplift of 21 percent. We think that's very significant for our business in North America," Manifold told an analysts' call.

Manifold said he would wait to see what happened with Trump's plans.

The world's third-biggest building group's North American core earnings or EBITDA grew by 11 percent year-on-year in the third quarter on sales growth of 1 percent. This compares with a 39 percent jump in EBITDA during more favourable weather in the first half.

Sales in Europe, where it derives most of the rest of its earnings, rose by 4 percent in the quarter, with Asia 3 percent ahead, pushing EBITDA in the first nine months of the year up 14 percent to 2.4 billion euros.

CRH, transformed by the 6.5 billion euro ($6.97 billion)acquisition of assets from rivals Lafarge (Xetra: 504482.DE - news) and Holcim in 2014, reiterated its guidance for full year EBITDA "in excess of" 3 billion euros and year-end net debt of less than 2 times EBITDA.

Analysts at Davy Stockbrokers said the sales performance was better than that of CRH's rivals, who reported volume declines driven by poor weather and project delays and that its debt reduction put it in a "very strong position" entering 2017.

CRH's shares, which jumped to a nine-year high of 3,029 pence the day after the election, turned positive after Manifold's comments to analysts and were 2 percent higher at 2,734 at 0958 GMT.

($1 = 0.9327 euros) (Reporting by Padraic Halpin. Editing by Jane Merriman)