Boral has cut its interim payout on a 40 per cent first-half profit dive, with the troubled building materials firm weighed down by higher costs and weak housing construction activity in Australia and South Korea.
Boral’s net profit plunged by $91.5 million to $136.5 million in the six months to December 31, down from $228 million a year ago, as the firm booked $20 million in costs associated with restructuring, rightsizing and integration costs, as well as USG Boral/Knauf transaction costs.
Revenue from continuing operations was up 2.2 per cent to $2.960 billion, though total revenue dipped to $2.989 billion from $2.990 billion last year.
Boral said its Australian operations were hurt by lower concrete volumes due to a 23 per cent decline in housing starts.
Local earnings also suffered as a result of subdued pricing, higher costs associated with outages at Peppertree Quarry and Berrima Cement and the summer’s bushfire crisis.
This was partly offset by $30 million in cost saving and property earnings of $29 million.
The company will pay an interim dividend 9.5 cents, 50 per cent franked, down from 13.5 cents a year ago.
As flagged earlier this month, Boral faces a number of headwinds going into the second half.
The company is searching for a new chief executive after outgoing boss Mike Kane announced he would be stepping down after seven years in charge following an accounts scandal at Boral’s North American windows business.
An investigation found employees overstated pre-tax earnings by $US24.4 million ($A36.6 million) at the windows division between March 2018 and October 2019.
Boral has sacked the windows segment’s vice-president of finance and the financial controller, with light building products president Joel Charlton now responsible for the division.
The company said this month it now expects core earnings for FY20 to be lower across its Australian, North American and USG Boral units, also thanks to bushfire disruptions and a general slowdown in activity.
It flagged net profit of between $320 million and $340 million, down from $420 million last year, adjusted for the overstatement at the windows business.
Shares in the company were down 0.21 per cent to $4.81 by 1430 AEDT.
Boral’s share price has slipped 40 per cent since hitting a more than decade high of $8.22 in February 2018.
BORAL’S TOUGH FIRST HALF
* Revenue from continuing operations up 2.2 per cent to $2.96b
* Total revenue $2.989b from $2.990b last year
* Net profit down 40pct to $136.5m
* Interim dividend 9.5 cents, 50pct franked, down from 13.5 cents.