Australian building materials major, Boral Ltd, announced that continued weakness in the domestic housing sector and weaker-than-expected results from its Construction Materials and Building Products operations adversely impacted its third quarter earnings.
In a recent trading statement, the company said it now expects its net profit before one-off items to 30 June 2013 to be in the range A$90m to A$105m, assuming a further US$10m from property sales yet to be finalised. That would compare to last year's figure of A$101m.
Boral reported that its Construction Materials & Cement division’s third quarter earnings were hurt by declining residential construction activity in Victoria, project delays in both Victoria and South Australia and poor weather in south east Queensland.
As a result of these factors, divisional third quarter earnings were A$19m below forecast. It is anticipated, however, that increased revenues from the major LNG projects in Queensland and Western Australia and the ongoing overhead cost reduction programs will sustain an earnings improvement over the prior year.
The Australian Building Products division, while benefitting from ongoing restructuring and cost reduction programmes, has reported a further decline in earnings from both its Timber operations as a result of the high Australian dollar and import competition, and its West Australian brick and masonry operations where lower demand and increased pricing pressure continue to adversely impact results.
Boral said it is continuing to focus on its “Fix, Execute and Transform” strategy to improve performance by restructuring, divesting non-core assets, continued focus on cost and realigning production capacities to mid-cycle levels.
Boral will announce its FY2013 results on 21 August 2013.
