Ladies and gentlemen, welcome to the CRH Plc 2018 April trading Update Conference Call. Please go ahead, Mr. Manifold.
Good morning, Edwin. Albert Manifold, CRH Group Chief Executive here, and you're very welcome to our conference call this morning. Which accompanies our trading update issued in advance of our AGM tomorrow. Joining me on the call this morning is Sena Murphy, our Group Finance Director and Frank Icekamp, Head of Investor Relations. Now following some short introductory remarks, we'll be available to take any questions you may have on this morning's announcements.
We have approximately 30 minutes scheduled for our call this morning and we aim to finish up here around 9 o'clock or so. Our announcement this morning provides details of our trading performance for the 3 months of 2018, an update of our recent development activity, as well as giving an indication of our EBITDA expectations for the 1st 6 months of the year and indeed, our outlook for the year as a whole. We've also announced this morning the establishment of 1,000,000,000 share buyback program, and we'll go into it a bit more detail a little later on. Now, beginning with our first quarter trading performance, overall, it's been a solid start to the year for CRH, considering the extremely cold and disrupted weather conditions experienced across many of our markets. Group sales for our seasonally less significant quarter of the year declined by 2% on a like for like basis, with Europe down 2% at the Americas minus 3% and Asia down 5%.
Let me now briefly take you through the trading trends in each of the main geographies. So starting with Europe, where our like for like sales climbed by 2%. Improved pricing in the majority of our key markets was not sufficient to offset lower volumes as a result of severe and prolonged winter weather conditions. Also, the timing of Easter holidays this year resulted in fewer trading days in the first quarter of 2018 compared to 2017. In our Euro Heavy side businesses, like for like sales declined by 3% as the severe weather conditions negatively impacted volumes and indeed activity levels.
K had a challenging start to the year with volume declines across all product areas as a result of some particularly harsh weather during February March. And although the pricing environment remains competitive, it's encouraging to see cement and aggregates pricing moving on ahead in the period. Despite this somewhat slow start, we expect that our UK businesses with its natural footprint and infrastructure focus will deliver another broadly stable performance in 2018. Global volumes in France were partly offset by higher pricing in the period. By in Switzerland, we experienced some volume recovery against the backdrop of a pricing environment.
In Finland, our cement volumes were ahead in the first quarter, while prices remained broadly stable. In Germany, we see a positive demand environment and cement prices are ahead of last year. Extremely cold conditions across most of these Eastern Europe negatively impacted our cement volumes in the region, but it's encouraging to see positive pricing pricing trends in Poland, Romania and Ukraine. So overall, we consider this a resilient trading performance despite the extremely disruptive weather conditions our heavy side businesses had to contend with. And of course, good see pricing also moving on ahead in a number of our key markets.
Our Europe light side business had a strong first quarter also experiencing some challenging weather conditions. Like for like sales were up 3% with increased activity levels across most product segments and with our key markets, Germany and the UK, entities and Netherlands all performing well. In distribution, like for like sales were 1% behind the prior year, primarily due to the challenging weather conditions we mentioned earlier. Our merchandising businesses in the Netherlands continue to benefit from good growth in new residential construction, while our sanitary, heating and plumbing business in Germany also performed well. In contrast, trading conditions in Switzerland remain challenging as a result lower residential construction activity.
So overall in Europe, you can see the benefits of balance in our businesses, with good growth in our life side business, helping to offset some of the weather impacts experienced in our head design and distribution businesses. We're encouraged by the progress being made with regard to further price improvements in the region, the overall strength of the European economy should support continued construction growth for the remainder of 2018. Now turning to the Americas. Where despite a positive market backdrop, our like for like sales declined by 3% due to harsh winter weather, particularly in the Central And Eastern United States. In our Medical Materials division, 1st quarter like for like sales were down 2% compared to 2017.
Our ags and asphalt volumes were negatively impacted unfavorable weather conditions. However, the pricing environment remained positive with price to promote products moving on ahead in the period. It's worth remembering that our Materials business is extremely seasonal and the first quarter typically counts for only 10% to 20% of our annual material volumes. First quarter trading in our Americas Products division was also somewhat mixed. Shipments at our Architectural Products business were impacted by adverse weather conditions in the Eastern United States.
While our precast business has benefited from good demand in the west of the country. Our building envelope business was behind due to a combination of unfavorable weather conditions and some lower project activity in quarter 1. Considering the severity and persistence of the recent challenging weather conditions in parts of the United States, we had a satisfactory start to the year in the Americas. And looking at our backlogs and talking to our customers gives us confidence that we can recover annualized volumes in our seasonally more significant second and third quarters. And finally to Asia, like light sales declined by 5% in the first quarter of the year as declining volumes in the Philippines were only partly offset by rising prices.
So for the group overall and excluding the impact of adverse weather, it's been a solid start to the year. Albeit in our seasonally less significant trading periods. And looking forward to the first half and indeed the rest of 2018, we expect a positive underlying momentum in our business to come through resulting in another year of progress for the group. But before I go to the outlook in any more detail, let me just touch briefly on a few other items from this morning's announcements. 1st, to our recent development activities, and during the first quarter of the year, we completed 6 bolt on acquisition total spend of approximately 1,000,000.
The recently acquired Cemento Materials assets in Florida are performing very much in line with expectations. And I'm pleased to announce that in a related transaction, we have reached an agreement to merge Swannie American cement with our existing 5050 American cement joint venture in Florida. This non cash deal leaves CRH owning 80 percent of the enlarged business, further strengthening our position in Central And Northern Florida, while delivering operational and vertical integration synergies to the group. The sales acquisition in Europe is also performing well and the integration of that business is progressing very much as planned. The Ashcroft transaction is progressing through regulatory approval in the United States and is expected to close in the coming weeks.
As you know, active portfolio management is an embedded practice at CRH and we continue to assess our portfolio to identify and focus our businesses, which offer more attractive returns for our shareholders. With this continuing commitment and building on the progress we have made in this area in recent years, we expect further divestment proceeds of between 1,000,000,000 to 1,000,000,000 over the medium term for businesses no longer meeting our returns in growth criteria or for which serrated and along with the best long term owner. As announced separately this morning, after careful consideration and having carried out an assessment of the anticipated capital requirements for 2018, The board of CRH has decided to return 1,000,000,000 of excess cash to our shareholders in the form of a share buyback program, which is expected to be executed over the next 12 months. Turning now to the outlook. And following a very significantly well instructed first half, we expect first half group EBITDA to be in line with the first half of twenty seventeen on a like for like basis.
In Europe, like for like half one EBITDA is expected to be slightly ahead of the first half of twenty seventeen. Whilst in the Americas like for like first half EBITDA is expected to be in line. EBITDA for Asia division is expected to be behind due to competitive conditions in the Philippines. Looking ahead to the second half of the year, and based on the trading backdrop in our main markets and the momentum we see in our businesses, we continue to expect further progress on a group EBITDA basis in the second half of twenty eighteen. Sitting here in April, of course, it's very difficult with our 2 seasonally most important quarters ahead of us.
It's difficult to be specific at this stage of the year about the details, but we will come back to you and update you on our progress as the construction season gets underway. And so a final few words before we hand over to Q And A. Our job here today is not new. It's not a departure for CRH. We are a group that's focused as ever on delivering industry leading returns for our shareholders and 2018 will be the end of the year of progress in that regard.
For this, the day to day managing our businesses, and making them better, managing our portfolio through the allocation and reallocation of capital, or indeed through a share buyback program all done in the name of returns and what we believe is the best long term interest of our shareholders. So with that, I'm going to hand you back to Q and I believe we have some questions on the line. In framing your questions, please be aware it's still very early in the season. And so many of our responses are going to be more directional than quantitative in at this of the year. May I ask you to please state your name and the name of your institution that you are present with posing your questions?
And now I'm going to hand you back to the moderator to coordinate the questions and answer session of our call. Okay.
Okay. Our first question comes in from the line of Gregor Kulich calling from UBS. Please go ahead.
Hi, good morning. I've got two questions. So the first one is on the buyback, which is obviously, I think the first time you've gone down this route for, I believe, around 10 years. So I want to understand to what extent that signals, the value that you see in external growth relative your own shares. Is that part of the thinking or is it purely about returning excess capital, that you believe you've got to shareholders?
Question. The second question is on disposal. So obviously understand that this is a bit of a continuation of what you've actually been doing for a number of years. Is the idea here to try to unlock value as a little bit like with the U. S.
Distribution sale? We're obviously you managed to get a very high multiple? Or is this more like perhaps the early days of your disposal program when you took over as chief executive, where it was a bit of a portfolio cleansing and less about trying to unlock value I guess the reason why I ask is because obviously disposals in its own right are can obviously be quite good, but if the value achieved in terms of multiple, I guess, from a longer term perspective isn't there, it perhaps didn't add as much. So that's where that bad question is coming Thank you.
Thank you, Gregor. Two questions there. And with regard to the buyback, I mean, the buyback is really us taking an opportunity. Looking at the strength of our balance sheet at this moment in time. And that's we have a unique situation here.
We have a particularly strong balance sheet given the the proceeds received from the disposal of Allied, the very strong position we had on our balance sheet at the end of 2017 with a very strong year of cash generation. The benefits of the U. S. Tax reform coming through. And looking at that and looking at the fact that last year, we completed in the Americas over four point $1,000,000,000 worth of acquisitions, which have yet to be integrated and delivered value with the sales acquisition of another $600,000,000, so almost $5,000,000,000 of deals done last year that we need to focus on embedding them within our businesses, integrating them and delivering value.
So perhaps hitting the pause button on developments to focus on that much the same as with regard to Olson. And with that in mind and our needs for cash going forward and the particularly strong cash position we're in, we find ourselves having excess cash. That's combined with the fact that when we look at the what we consider to be the intrinsic long term buying of our look at the dislocation there is with that value with the current share price, we're taking the opportunity to use our balance sheet to create value for our shareholders by using that balance sheet to, to launch the share buyback program. That's really down to those unique set of circumstances. As you rightly say, it's something we've used before, and I suspect it's something we use again.
Really, it's just really a further demonstration that whatever we do in ZH, we will pull whatever lever is possible to try and create value for our shareholders going forward. With regard to the disposals, the disposal program is really just about capital efficiency within our businesses, making sure that wherever we have a dollar or euro of invested capital, working as hard as it possibly can to create value now and in the future for our businesses. And it's as much about looking at underperforming businesses as it is about reshaping the group for the future looking at the future demand for our businesses. And when we look at our group going forward for the future, we look at future trends in terms of where the markets are going. We're looking to obviously increase revenue growth driven by good macro environments, but also our ability to deliver within that.
In addition to that, we're looking for further acquisition opportunities. We work thankfully for the fragmented industry. And we if we have our acquisition opportunities to build on top of the naturally recurring organic growth, gives us further opportunities for growth. And, and, seriously, importantly, it looks, it's about how we shape the group in terms of buying businesses or having businesses will remain within the group they must be able to contribute to the overall group. So the integrated nature of business is very, very important.
It's why our returns are industry leading. So looking at the business we have, they have to be able to provide revenue growth, acquisition opportunities, and they have to physically group in terms of the value creation within our businesses not just for today, but also going forward for the future. So the main criteria, which we look at to reshape the group going forward, and that's what drives the portfolio decision whether business stays within or whether.
Thank you very much.
The next question comes in from the line of Robert East calling from Goodbody.
Just two questions for me. Just on the US and specifically around infrastructure, like over the last 18 months, we've had a lot of uncertainty about funding, you know, trump hype delayed and getting fast act up and running. What are you seeing on the ground in terms of backlogs and you can you know, even put a few figures around it in terms of, you know, potential growth in that segment, just given that uncertain backdrop that we've had for some time. And, you know, staying with the US, you know, from a lot of corporates, we're hearing about cost pressures and whether it's, you know, labor, or, you know, other elements of the, of the cost base just for your experiences at the moment. And I'm talking outside of oil related costs.
And they're my two questions.
Okay. Maybe if I can just take that, maybe 2 big pictures, big picture questions to start Lovers. The funding and the backlog. And I'll ask Sanath talk about the cost pressures we're seeing within our business in North America. The overall picture on funding for this year actually, it's probably a better picture than we for a number of years.
Of course, the fast track sort of been well integrated in terms of what the funding backlog is in terms of going forward. What I think you know, but maybe a lot of people have picked up on, of course, is that when on 23rd March, when the actual appropriation was made for for 2018, a further $2,500,000,000 of federal funding was allocated for 2018, which means the total federal spend this year is actually up 8% which was very significant. The states themselves are up about 3%, which gives you a total spend, a total increase of about 5%, which is a good couple of percent ahead of last year, So the overall funding backdrop is quite encouraging. And within our backlogs, the backlogs are going to sound very encouraging when I go through them for you, but you've been around as long as so you'll know, normally, when you come out of the slow first quarter and because we have weather here first quarter, the backlogs will build, but in actual, but they are, they are quite strong. So there are ag backlogs as we start into this only last week's information.
So our ice backlogs are plus 11% in last year, asphalt backlogs are plus 12% ready mix is plus 18%, construction overall construction up 14% and margin well ahead as well. But they're particularly stronger than just the rollover of the first quarter. So it's the momentum seems to be good within the business as well. And April had we've had a good run of weather during the month of April. So that's those backyards are last week.
So we've had a 1st couple weeks delivery. So backlog seems to be quite strong quite good. Pretty much in line with what we said about sort of a very positive backlog for U. S. Public infrastructures then going forward.
Maybe on the cost side?
No, I mean, outside of energy, which is the way you set the question up, Robert, I mean, labor is a big cost element. Labor inflation for us in the business. We're still seeing numbers of about 3%, maybe 3%, 4% in North America. One thing I would say about labor, I think it's as much about availability of labor as it is, the cost of labor. So I think as you mentioned and we talked about, we have strong backlogs at this point in the year now.
And the main challenge really for us on the labor we'll be making sure there's availability of labor to get the work done in the months ahead as opposed to the cost number is still modest enough in terms of inflation.
Okay. Thank you.
The next question comes calling from Davy. Please go ahead.
Yeah, good morning, all 2 for me as well, please. So we won't have a lot of comments in your European heavy division there around pricing. I can't age geographies there. We talk about prices increasing or ahead in the first quarter. So just the interest gets you taught there and momentum around pricing in Europe as a whole.
And I
just want to come back likewise on kind of disposals and bolt ons. I'm just wondering if the best of your U. S. Distribution division, and I'm just wondering if you see a shift in the business away from products, distribution or cement? Or how should we kind of think about that?
Or should we be thinking more about the balance of the group in those terms? Thanks very much.
Thanks, Bob. Good morning to you. I mean, two questions there. With regard to your pricing, yes, you're right. Look, we've been talking about to the market.
Sales end of 2016 through 2017. And momentum continuing to build in a positive way and good to see it. And the pricing season is is upon us. And in fact, it's merely finished now at this stage. And as you've seen this morning, a lot of the prices are moving in the right direction, more anemic than I would like.
But not surprised given the early stage recovery that we are in. And it feels to me like this at the United States in about 2012 or anybody who's around them will remember volumes had only just started to recover from a very low base and we were slipping in sort of 1% 2% price increases. And then after a couple of years, it builds momentum. But It's good to see now it's pretty much broadly spelled. The only part where we have still got a little bit of difficulty due to local issues is in Switzerland, but broadly speaking across all of our European markets, pricing are moving ahead.
And that momentum is good to see. And I think that momentum will continue to build. Remember, we had no pricing in European cement for, gosh, and going back to 2009 at this stage, 2010. So there's 5 or 6 years of late and potentially have come through, and that would be a big a big fill up to our businesses as we go forward. And with regard to the disposal and the fact that we've disposed of allied distribution, and this is signal shift to the business in any particular way or not, look, CRH has a very well proven strategy, which is one of the balance and balance in terms of end markets and geographies, and that has very serviced very well and will continue to service very well as we go forward.
When we talk about balance, it doesn't matter what the product you sell is. If the market you sell is entered, that's the term amount of that particular product is. The fact that in recent years, we have disposed of our distribution business, I think we made it very clear why we were doing this in terms of that we had run out of road in terms of acquisition opportunities and the fact that we saw greater value creation in other parts of the business and the fact that those opportunities happens to be on the heavier side doesn't signal any shift whatsoever in our strategy of our business. Our business is being built on and being a balanced business across different sectors, different geographies and different end use, where there's newer OMI res public infrastructure, the Americas or Europe, and that will continue to be the case going forward. That balances service well through many, many cycles.
And I think one of the key things that you will see about CRH is we manage the cycles better than anybody else and the success we have seen in our business over the last 5 years in terms of profit growth and revenue growth and value of our shareholders, that is delivered on the back of how we manage the down cycle from 2009 to 2014. And it's how we manage that cycle is done by balance and balance end use and by geographies and that's fundamental part of our investment thesis and that continues over the years ahead.
The next question comes in from the line of Ives Broomhead.
Good morning. Two questions for me as well. On your H1 and full year 2018 like for like the outlook, it seems that a lot of independent on the European earnings growth. Could you maybe give us more granularity as to what has been driven in the strong light side like for like sale in Europe in Q1 versus other products? It doesn't seem like they've been suffering from much weather related issues.
And do you expect margins in this division to offset pressures in Switzerland? And the UK possibly? And just sticking to the gym minutes, do you expect the recent price increases that you've seen recently in in aggregate and so forth to cover the cost inflation. And then my second question will be on your H1 outlook in the Turkish division. I mean, you mentioned that you've got almost a double digit increase in the backlog across your different products, but you expect a flat like for like EBITDA growth in H1?
Could you give us maybe the reasoning behind this and if at all it is impacted by the recent surge in the oil price environment? Thank you very much.
Okay. 3 questions there. Firstly, on the European Lifestyle and the Performance Lifestyle business, really, it's more to do with the fact that the end use exposure may be relating back to the previous question I have there is that you find that the business that are not totally exposed to heavy side newbuild construction other ones that perform better. And our products business, generally speaking, across here, are more exposed to OMI work than they are under without construction. And OMI work is by nature.
Is less heavy. And in fact, a lot of it can take place inside buildings or in protected areas. So that is why that has been left impacted by the weather. And hence, we've seen better performance perhaps probably more more indicative of the trends, the construction trends in Europe, because not so heavily impacted by, and by the the weather that's actually out there. With regards to price increases in North America in terms of the Aggregates and the heavy side businesses, I do think that the price increases that
we're seeing there, which we,
of course, we have to deliver them, but the indications by good. There will be some good progress this year with regards to price increases across all our products. I think it will offset in terms of any cost increases we see coming through our businesses. There are higher energy costs. And as Senator has already talked this morning about the labor costs coming through there from our point of view, of course, that's something we have to manage.
But they're well segmented and well understood. And from our point of view, we believe that they will, they will discover those costs coming through.
Yes, I would say to have one comments that you made about the Americas. And if you take the backlog conversation that Albert mentioned, the backlog that's there at the start of Q2, it will take Q2, Q3 to work our way into that backlog as opposed to expecting that to be caught up by the end of half one. And obviously bear in mind that half 1, well, it's a very small quarter.
It has been a slow quarter. So we have work
to do in the early part of Q2 to catch up on the, the, you know, the snow Q1 that we've had
and
hence the like for like commentary around half one for the Americas. It's not a statement about energy costs and the ability to recover them.
And just clarify the point about sort of if our backlogs are up so strong in terms of our guidance for the first half of the year, it's more a question of capacity and our customers rather than capacity for us to deliver. And there's only a certain amount of resources available to get work done and it's really more to do with that. It'll just take longer to unwind. Rob, but if you miss, I mean, effectively the construction season can start from, broadly speaking, mid February, start to build momentum during March, pretty much lost, so 10, 15 days across North America. The UK alone lost 15 days, and that will define 15 new days during the course of the next quarter.
It will restore flat for the to be to be sort of normal levels of activity at the end of the first half, you won't find that, but it long lines during the course of the season.
Great. Thank you very much. Have a good day.
The next question comes in from the line of Allodi Roll calling from JP Morgan. Please go ahead.
Hi, good morning. I got a question please. The first one is on the listing of the U. S. Asset, there's been some potential news in the press.
Could you please comment about that please. And the second one on the UK, in a slow start of the year, but the pricing environment seems to be still quite robust. So can you help us in understanding what your expectations are for the rest of the year on volume do you think you can make up that slow start of the year and what the environment is looking like in the UK in general? Thank you.
Okay. Well, with regard to the U. S, and of course, we have seen a number of ports releasing, which are high level reports talking about that we were to move some overall of our listing to the U. S. Maybe perhaps it might create value or generating value for our shareholders.
Look, this is something we've looked at a number of times over the years in CRH. It's never made sense for us in the past, but we continue to look at it with our advisors and keep the matter under review or some people miss when they look at this is the fact that we are we're very much an integrated group and we very much drive value, not only within the group through vertical integration, but significantly across the group. And if I just look at the year ahead of us and I think of all the work we have to do particularly in North America in driving some of the synergies and the large deals we have over there, we've already announced on the cement businesses synergies across Ash Grove will be $120,000,000, $100,000,000. And then these synergies within Swannie are $20,000,000. We talked this morning about the merger of our Swannie and American Senate business that's going to generate probably another $10,000,000 to $15,000,000 of synergies.
Pretty much all of those synergies are going to have to be delivered by our European based Cement teams. We will have teams on the ground of somewhere between 50 to 150 people for a year or 2 years working within those businesses, delivering the value that way And that was very much the case as well when we had the Lafarge Holston transaction. We put the specific organization in place to deliver the synergies and they did deliver the synergies and delivered value for our shareholders Of course, there's big procurement flows, global procurement programs that we've worked on. And we on average, say, between 2.5% to 3.5% of our procurement segment, putting putting products and services into those procurement programs, very group wide programs. And if you're going to look at splitting up the business, you take into consideration the dis synergies that are caused by those areas, areas such as OpEx and Connex and the whole ideas on how we manage markets and customer management the way we handle developments in terms of coordinated development and synergies as well across that.
So all of these factors are what we take into consideration. When we look at how different ways we could structurally unlock value for our shareholders. We do keep an open mind to us. We do keep it under review and we'll continue to do so. And with regards to the UK and the strength of the UK and then in terms of how pricing is, well, you're absolutely right.
Broadly speaking, prices of products has been strong this year
and we've gone ahead. We need to
do that as of the UK, of course, went through the recession like the rest of Europe and went through a number of years where pricing didn't move. And the first quarter, we've had very significant weather impact, anybody who's been in Britain or Ireland know that. And because of that, we've had a very slow first quarter of the year, But the underlying demand and potential is good. Residential markets continue to be fairly robust in our businesses in the UK, particularly our atomic business. We've just happily, we won The maximum 5 big major contracts we could win out of the 7 big contracts were a bit of a major infrastructure program.
So we're very, very pleased with that. We'll continue to deliver value and volume for our products going forward for the next number of years. So we're sitting here in a good position at a pure true national business and we think that's During the course of quarter 2, 3 4, the slowdown in quarter 1, but unwind, and we expect overall it to be, as we said, broadly stable for the UK for 2018 2017.
Great. Thank you.
Thank you. I think we have time for just one more question before we hit the time here. So I can take one more, please.
Okay. So our final question comes in from the line of Will Jones calling from Redburn. Please go ahead. Thanks.
A couple for me, please. One was just focusing in on, the asphalt business in the U. S, perhaps you got on how the winter fill program is going, so how much you've done, how much you plan to do, and the kind of cost change in that process thus far I guess, more generally, how would you rate your chances of beating, matching or beating the, I think asphalt price, the selling price last year of the product was plus 3 years? Do you think that can be can be better in 2018? And then the second one is just around the Philippines.
And I also see a small part of the group now, but there's a comment there that cement prices were ahead of 1Q 'seventeen. Is that just because pricing gateway in Q2 onwards last year or has there been a change sequentially in Q1 against Q4, if you sort of mean?
Thank you. Good morning. And just with regard to our winter program, I have to say, our program starts pretty much about August. The plan was all the way through to April or May. So just give you the extent of that program.
And we're almost at the end of it now at this stage. I think we bought well through the season. And we've brought all about through the last sort of almost 6 months at months. We're happy with what's in our tanks. And overall, the costs are slightly higher than last year, but no surprises given where oil prices has been.
And they as we often say, it's not about the price of the actual asphalt. It's actually the margin spread between what we pay and what we charge. And the key competitive advantage we have with our WILTI program is that it is bitumen, which we buy during the winter months, is seasonally, structurally, seasonally cheaper than it is in the bidding season. And what we do is it not only gives us an advantage on costs, it ought to give us certain supply and security of supplies, your business for those contracts. If you do want to see prices of bitumen up, you want to see them up at this time of the year because as contract work gets bid now.
And remember, the work we're bidding in the month of April will get, will get performed and executed in the month of June July. So you don't want a low bitumen price and a high oil at our bitumen price in Juno. You actually want it
now, so you get a bit into the work at least
you get paid for it. So given that, I think that we will we are in a pretty good position with the winter full season we've had, what we have in our tanks, the price we have in our tanks, like at this point at the time, we think that oil is up where it's going to be for the next couple of months. We think that we're in pretty well placed in terms
of maintaining a margin and hopefully increasing
a margin asphalt during the course of this year. And just looking to turn into the Philippines, and you're right, the pricing has been up in the first quarter versus last year. I think that's maybe 2 things last year was very weak as a result of intense competitive pressure both nationally and indeed in terms of imports. I think the number of things happens during the course of the year. That meant, I think that the pressure from imports was somewhat lessened.
And I think the fact that, I think the the pain of last year and has bitten hard with everybody, both the imported entity, the NASH producers, and it meant that the system prices improve. And I would expect this year to be continued to be a difficult year, but I expect this year to be the bottom. And I think the billing blocks have been put in place during the course of the end of last year this year. So this business will continue to build its profitability from 2019 and beyond. And the price increase
in Q1 was an improvement over Q4. So it was not just year on year, but it's also quarter on quarter. Great. Thank you.
Okay. Thanks, Will. Well, ladies and gentlemen, that's all we have time for this morning. I want to thank you for your attention. And as always, if you have any follow-up questions, Please feel free to get in touch with our Investor Relations team here in Davin.
And we look forward to talking to you again on August 23, when we report our interim results for the 1st 6 months of 2018. Thank you very much and have a good day.
Ladies and gentlemen, thank you for joining today's call. You may now disconnect your hands