Boral report half-year results
Company announces positive sales and profit but still faces ongoing challenges and cost-saving measures
LAST month Boral reported a 14% rise in sales revenue, to A$2.77 billion, for the second half of 2012, compared with the same period of 2011. Earning before interest and tax (EBIT) also increased by 3% to A$112 million.
The company announced a positive net profit after tax of A€52 million, although this figure excludes significant items costing A€77 million, resulting in an actual net after tax loss of A€25 million. Significant items included asset impairment charges relating to the suspension of clinker production at Waurn Ponds, Victoria, and first-half restructuring and redundancy costs, which were partially offset by a gain on the divestment of the company’s Asian Construction Materials businesses.
Mike Kane, CEO and managing director of Boral, said some of the company’s businesses performed ahead of expectation, but others disappointed as they continued to face external challenges and are still transitioning to lower cost bases and more appropriate production configurations and organization structures.
‘In Australia, Construction Materials delivered a solid 25% improvement in EBIT, but Cement reported a 15% decline and Building Products reported a very disappointing A$18 million first half loss, following an A€11 million loss in the second half last year,’ he commented.
One of Boral’s key objectives is to realign the US business to the changed market conditions and position the company to take full advantage of the US market recovery.
Mr Kane continued: ‘While the rates of market recoveries remain uncertain and adverse weather conditions can have a significant impact, the progress already made in realigning overhead costs, strengthening the portfolio and improving the balance sheet, positions Boral very well, particularly on the back of ongoing resources work in Australia and the US market recovery. We expect a significant volume uplift in the US in the final quarter of this financial year.’