Boral revenue and EBIT up; results marred by high costs

Boral Limited has reported its results for the full year ending 30 June 2013, showing full year profit after tax (before significant items) of AU$104 million – 3% ahead of the previous year. Sales revenue was up 6% y/y and EBIT before significant items increased by 14%.

Significant items, however, sucked a significant AU$316 million off the full year profit, leaving the group with a reported net loss after tax of AU$212 million. These items related to asset impairments as a result of capacity rationalisation and permanent structural industry changes in Australia, as well as organisational restructuring and redundancy costs.

Boral’s CEO & Managing Director, Mike Kane, said that the Group’s businesses have been contending with low levels of activity, increased competition and the negative impact of the carbon tax in Australia. However, he added that the Group’s efforts to reduce costs and capital expenditure and improve cash flow place Boral in a good position when the markets improve.

“During the period we announced AU$105 million of annualised cost savings as a result of overhead reductions and cement manufacturing restructuring, with AU$37 million delivered in FY2013. We generated AU$173 million of cash from divestments and the sale of surplus land, which is in line with a two-year target to generate between AU$200 million and AU$300 million of cash,” he said. Mr Kane also stated that the Group will continue to focus on safety in a bid to reduce the lost time injury frequency rate in line with global best practice.

Of the group segments, Construction Materials & Cement delivered a strong performance with a 16% EBIT improvement on the back of major project activity, prior year acquisitions and property sales. The gypsum division performed less favourably and Building Products were also disappointing.

The Group is optimistic that it is well placed for improved earnings and to reap the benefits of the restructuring programme. However, the expectation is that FY2014 results will not exceed that of FY2013.

Adapted from press release by Katherine Guenioui