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Boral reports on its performance in the half year ended 31 December 2013

World Cement,

1H14 results, for the six months ending 31 December 2013

Australia’s Boral Ltd has released its results for the six months ending 31 December 2013. Total sales revenue increased by 4% y/y to AUS$2.87 billion and EBIT reached AUS$168 million, 49% higher than the comparable period the previous year.

Cost realignment and restructuring initiatives, along with higher sales volumes, favourable weather conditions in Australia and improved conditions in several key markets helped to drive the company’s half-year results.

Before significant items, profit before tax grew by 73% to AUS$90 million. However, due to the timing of the completion of Boral’s joint venture with USG, the half-year ended in a net after tax loss of AUS$26 million.

  • Construction Materials and Cement: earnings were up by 6% as a results of dry weather conditions in Queensland and New South Wales, strong project activity and the positive impact of the cost reduction and restructuring programmes.
  • Building Products: increasing demand for housing construction in New South Wales and Western Australia, in addition to a marked reduction on this business section’s cost base helped the Building Products division to turn a modest profit following a loss the previous year.
  • Boral Gypsum: an 11% rise in plasterboard sales volumes in Asia and an improvement in the Australian business led to a 30% increase in earnings.
  • Boral USA: losses reduced by 23%, aided by a substantial rise in volumes across the firm’s US businesses.

Prospects for FY14

  • Underlying earnings for the Construction Materials and Cement business are expected to improve significantly, helping to mitigate lower Property earnings.
  • The Building Products business has been forecast to achieve a small profit.
  • Boral Gypsum is likely to deliver a good underlying performance, although this may be offset by the integration costs related to the joint venture with USG.
  • If housing starts in the USA exceed an annualised run rate of 1.1 million in 4Q and thereby boost single family starts and custom home builder activity then Boral USA will deliver a profit in 4Q14.

“We expect the underlying performance in each of Boral’s four divisions to improve in the second half of the financial year compared to the prior comparable period”, said Mike Kane, Boral CEO and Managing Director.

“Our focus on improving the underlying performance of Boral’s businesses through restructuring and portfolio realignment, together with the ongoing market recovery in the USA, improved housing activity in Australia and continued growth in Asia, will deliver benefits beyond the current financial year,” added Kane.

Adapted from press release by

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