This article is from the Australian Property Journal archive
BUILDING materials supplier James Hardies has posted a 26% decline in second quarter profit as the United States housing market continues decline sharply.
James Hardie yesterday reported a net operating profit excluding asbestos, ASIC expenses and tax adjustments of $US36.2 million ($A55.8 million) for the quarter ended September 30 2008.
Including these items expenses, the company’s operating profit jumped from $US19.1 million to $US153.5 million.
For the half, net operating profit excluding expenses fell 36%, from $US119.8 million to $US76.2 million.
For the half year, net sales decreased 13% to $US706.9 million, gross profit was down 22% to $US237.2 million and EBIT excluding asbestos and ASIC expenses decreased 33% to $US122.2 million. EBIT including asbestos and ASIC expenses increased 80% from $US119.7 million to $US215.1 million.
CEO Louis Gries said the result was mainly due to the effect of foreign exchange adjustments on the asbestos liability which has been favourably impacted by the depreciation of the $A against the $US.
And he said operating results were significantly affected by the US housing market, where housing starts fell 35% in each of the second quarter and the half year compared to the same periods last year.
”The US housing market continued to decline sharply during the quarter and it now appears that US housing starts will fall below the 800,000 level that our plant schedules were set for in April 2008,” he added.
Gries said given these current conditions and the high level of uncertainty surrounding the global economy and future industry trends, the board has decided to cancel the interim dividend.
Gries expects building approvals will continue to fall in Australia and New Zealand during fiscal year 2009.
Australian Property Journal
