Highlights from Boral’s financial results for FY2014

Australia’s Boral Limited has released its results for the year ended 30 June 2014, as well as its outlook for the 2015 financial year.

FY2014 results

• Net profit after tax and before significant items increased by 64% to reach AUS$171 million.
• After significant items, net profit after tax totalled AUS$173 million.
• Sales revenue from continuing operations improved by 7%. However, Boral’s sales revenue came in at slightly lower than last year at AUS$5.2 billion. This has been attributed to four months of equity accounting in the Gypsum division following the creation of the USG Boral joint venture.
• EBIT before significant items grew by 29% to AUS$294 million.
• The company’s Construction Materials & Cement division contributed AUS$277 million to EBIT, while the Building Products division made an EBIT contribution of AUS$8 million. The latter represents a significant improvement on last year, when losses were reported. Meanwhile, Boral USA recorded an EBIT loss of US$35 million, compared to a loss of US$66 million the previous year.

“Our focus on improving the underlying performance of Boral’s businesses through restructuring and portfolio realignment is delivering clear benefits to the business. Together with the ongoing housing market recovery in the USA, improved housing activity in Australia and continued growth in Boral’s markets in Asia, these benefits contributed to Boral’s stronger result,” said Mike Kane, Boral’s CEO and Managing Director.

“In Boral’s largest division – Construction Materials & Cement – despite a AUS$20 million reduction in property earnings, the business closed the EBIT gap with improvements in underlying results. A significant EBIT contribution of AUS$277 million was broadly in line with last year. Average selling prices were disappointingly flat, however, restructuring, continuous improvements and cost reduction programs delivered tangible benefits, most notably in the Cement business.”

Expectations for the 2015 financial year

Boral expects a positive result from its Construction Materials & Cement division, although this could be hampered somewhat if the inability to realise price increases continues. The Building Products division is forecast to bring in double the EBIT it has reported in FY2014, while Boral USA is likely to break-even if housing starts of approximately 1.1 – 1.2 million for the year are achieved. Boral Gypsum is expected to ‘deliver a continued stronger underlying performance’.

“In FY2015, we expect growth in the US housing market and key markets in Asia but in Australia strength in the housing market and non-residential activity will be offset by a slowdown in roads and infrastructure activity. Overall, we expect improvements in the performance of each of Boral’s four divisions,” added Mr Kane.

Adapted from press release by Louise Fordham

Read the article online at: https://www.worldcement.com/asia-pacific-rim/27082014/boral-fy2014-results-released-362/