Boral posts lower 1H earnings
Boral Ltd reported a statutory net profit after tax (NPAT) of AUD137m (US$90m) for the half-year ended 31 December 2019, after significant items of AUD20m. The half-year results reflects lower 1H earnings from Boral Australia and USG Boral due to cyclical declines in Australian and South Korean housing markets, partially offset by improvement initiatives. Volume pressures and higher costs also affected earnings of Boral North America.
EBITDA of AUD439m and EBITDA from continuing operations of US$440m were down six per cent, reflecting softer EBITDA in all three company divisions.
Commenting on the first half FY2020 result, Boral CEO and Managing Director, Mike Kane, said: “Boral’s first half FY2020 results were broadly in line with guidance, and we were encouraged by the performance of Boral Australia and USG Boral particularly given the significant downturns in housing activity in Australia and South Korea. Improvement programs and cost reduction initiatives in both divisions helped to offset the impact of lower volumes. We were disappointed however, with performance in Boral North America, largely due to shortcomings in our operational execution.
“In addition to the lower than expected first half results from Boral North America, we have had a challenging start to the second half of 2020 in Australia with higher costs and significantly lower volumes due to bushfire- and weather-related impacts.
“Australian infrastructure activity continues to be solid although delays and disruptions remain a feature of major infrastructure work. For example, we secured supply to the West Gate Tunnel project in Melbourne, which we were expecting to see come through in the second half, but as has been well-publicised, this project is currently delayed.
“We are resolutely focused on executing improvement initiatives over the remainder of the year to strengthen our business in North America and to improve outcomes in Australia,” Mr Kane said.
Boral Ltd provided a FY2020 NPAT guidance of AUD320m-340m.
