Adelaide Brighton warns shareholders of a downturn in lime sales volumes

Australian cement and lime producer Adelaide Brighton has told shareholders to expect demand for cement and clinker to be flat this year. At the shareholders’ annual meeting on 21 May, incoming Chief Executive Martin Brydon is reported to have said that lime sales volumes are likely to be down around 5% y/y due to the temporary suspension of operations of a major lime customer in the Northern Territory and the impact of gold mine closures. Meanwhile, the weakness in the non-residential construction sector and a decline in major projects in South Australia will impact cement and clinker demand. However, demand will be supported by growth in residential construction. Mr Brydon also noted that improved pricing in a lime supply contract with a major alumina producer will contribute AU$5 million to EBIT.

The company’s Birkenhead cement plant in South Australia underwent its annual planned shutdown in March and has since suffered operational problems, which Mr Brydon said are likely to cost pre-tax profits for this half-year AU$4 million. Taking that out of the equation and excluding certain other items, Adelaide Brighton is expecting 1H14 net profit and FY14 net profit to be similar to 2013 (AU$151.1 million).

The meeting marked the occasion of previous Chief Executive Mark Chellew officially handing over the reins to Mr Brydon. Mr Chellew has run the company for the last 13 years.

Edited from various sources by Katherine Guenioui

Read the article online at: https://www.worldcement.com/asia-pacific-rim/21052014/adelaide_brighton_warns_of_lower_lime_sales_227/