Irish building materials CRH said that it no longer holds large cash balances in euro at weekends, instead converting to US dollars or sterling, in response to concerns over a potential breakdown of the eurozone.
The group, which in 2011 reported annual revenues of just over €18bn, has about 40% of its earnings denominated in euro. CRH’s finance director, Maeve Carton, said that the group was avoiding keeping large euro cash balances in places from where it might be difficult to extract it overnight.
“It’s largely on the cash management side of things,” she said. “It’s very hard to know what exactly might happen. Over the weekends we would be putting our money into dollars or sterling. We tend to live in more dangerous times.” Carton added that the figure on weekend deposit at this time of year by CRH would typically be the equivalent of tens of millions of euro.
“It varies depending on the time of year,” added chief executive officer (CEO), Myles Lee. “At this time of year, generally we have very significant working capital requirements. Our cash balances would tend to be low in the middle part of the year and they build up as profitability kicks in more strongly in the second half of the year.
“We’re careful about the banks with whom we deposit. We deposit with prime-rated institutions. Their home base is important as well.”
Lee said that CRH had very strict criteria in terms of credit ratings for the institutions where the group placed cash balances. “Unfortunately for a number of years now, the Irish banks do not command the credit ratings that we need,” he added.
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