AdBri records revenues of AUD1569m in 2021
AdBri reported revenue of AUD1569.2m (US$1135m) compared to AUD1454.2m in 2020 with increased sales volumes experienced for all products other than lime. Strong sales demand was seen across all market segments, including residential, commercial, infrastructure and mining.
Reported net profit after tax (NPAT) attributable to members increased from AUD93.7m to AUD116.7m. Net debt increased by AUD65.3m to AUD437.4m at 31 December 2021, representing a leverage ratio of 1.6 times underlying EBITDA and gearing of 34.5 per cent, while interest cover was 14.4 times underlying EBITDA.
Cement and lime
Cement and lime growth was achieved in cement volumes during the year despite variable demand due to temporary government lockdowns that closed the construction sector in Victoria, New South Wales, South Australia and Northern Territory.
Lime volumes decreased as the Alcoa contract wound down. A contract extension with Adbri’s second-largest lime customer, South32, and agreements with Northern Star and Newmont Boddington reinforced Adbri’s reputation for reliable domestic supply.
Concrete aggregates and masonry
Concrete and aggregate volumes increased by nine and 22 per cent respectively, despite temporary construction industry restrictions in some markets and states due to the pandemic. Overall, masonry sales revenue increased by two per cent to AUS$149m as compared to the prior year.
The earnings contribution from joint ventures increased by AUD6.4m to AUD33.3m compared to the prior corresponding period. Strong demand across the southeast Queensland construction sector, saw a 115 per cent improvement in Sunstate Cement’s contribution to earnings. Independent Cement & Lime Pty's earnings rose by 13 per cent and Mawson Group's earings increased by 23 per cent.
Capex spending
Capex increased marginally to AUD140.5m (AUD103.4m stay-in-business capex and AUD34.5m for development). Development projects included the purchase of a pugmill and road access works for the Scotchy Pocket quarry, upgrade of the Birkenhead drymix plant and AUD14.1m for the Kwinana upgrade project. The company also injected AUD32.2m into a new 50/50 joint venture to acquire the Metro Quarry Group’s sand assets in Victoria.
“The Kwinana upgrade project will provide greater efficiencies in our Western Australian cement operations, with reduced electricity and diesel use, and lower emissions, compared to the existing operations,” said AdBri. “Progress on the lime strategy included completion of a pre-feasibility study for a new kiln in Kalgoorlie and commencement of a definitive feasibility study, expected to take 12-18 months. In December 2021, we completed the sale of our Hilltop land in Geelong.”
Outlook
Favourable market conditions are expected to continue in the construction and resources sector. Buoyant residential construction will underpin a strong order book until at least the middle of 2022, while multi-residential activity is also beginning to increase.
