Building materials maker Adelaide Brighton’s half year profit has fallen and it expects demand for cement to remain subdued.
The company made a net profit of $51 million in the six months to June 30, down 15 per cent from the prior year.
But revenue rose 3.9 per cent to $602 million due to improved prices, recovering east coast housing demand and resilient project activity.
Adelaide Brighton said cement and lime sales volumes declined while cement prices improved in the half. Demand for cement and bricks in 2014 would be similar to 2013, the company said.
Chief executive Martin Brydon said despite sales volumes declining, the east coast housing recovery generally offset softness in some local markets while rising prices lifted revenues.
“Concrete and masonry operations enjoyed solid earnings growth from strengthening demand and prices,” Mr Brydon said.
But the lime business was held back in the first half by short-term industry pressures in the minerals sector. The company expects to deliver benefits as it restructures some cement operations and corporate functions.
“Projects in Western Australia and the Northern Territory and a residential recovery are anticipated to offset weakness in the non-residential sector and a decline in infrastructure and health activity in South Australia,” the company said.
Meanwhile, lime sales volumes for 2014 are likely to be down by around five per cent on last year. Adelaide Brighton added that further land sales over the next three years could assist earnings over the next 12 months. The company expects full year underlying net profit after tax to be in the range of $153 million to $163 million.
It has also maintained its interim dividend at 7.5 cents per share.
ADELAIDE BRIGHTON TAKES PROFIT HIT AS CEMENT VOLUMES FALL
- First half profit of $51.2m, down 15.9 per cent from a $60.9m loss in 2012/13
- Revenue of $602m, up 3.9pct from $579.3m
- Interim dividend steady at 7.5 cents a share