Boral’s increased US losses

Boral’s increased US losses
Published: 19 August 2009

Boral’s full year turnover to the end of June amounted to Aus$4,875m (€2,843m), a 6.2% reduction, and the EBITDA was down by 21.7% to Aus$539m (€314m).  The Australian EBITDA was down by 12.8% to Aus$573m (€334m) and North America went into a loss and lost Aus$61m (€35m), but the Asian operations increased the contribution by 87.5% to Aus$30m (€16.5m).  The trading profit fell by 38.4% to Aus$276m (€161m) and with an interest charge some 14% higher at Aus$127m (€74m), the pre-tax profit dropped by 55.7% to Aus$149m (€87m).  Spending on capital investment and acquisitions amounted to Aus$240m (€139m) and though the net debt was virtually unchanged at Aus$1,514m (€882m), the gearing increased from 52% to 55% because of a stronger US dollar as 89% of the net debt was US dollar denominated.  Capital spending is being further reduced in the current financial year.

The Australian heavy construction materials business saw turnover decline by 4.8% to Aus$2,817m (€1,642m) and the EBITDA was off by 2.9% to Aus$475m (€277m).  The contribution from concrete and aggregates was some 5% lower in sales, but the EBITDA was only marginally lower, as good pricing helped to offset a 7% decline in aggregates shipments, largely resulting from a 12% fall in ready-mixed concrete volumes.  Blue Circle Southern Cement saw cement deliveries decline by 9%, but this was partially compensated for by a 7% increase in prices.  However higher energy costs and increased clinker imports to supply Sunstate Cement ’s Queensland cement business put pressure on margins.  Sunshine Cement’s annual grinding capacity has now been increased by one third to 1.5Mt.   BCSC’s lime volumes suffered from reduced demand from the steel and mining industries and volumes dropped by 29%, though prices were raised by 12%.

Building products in Australia experienced a 5.9% reduction in turnover to Aus$1,277m (€744m) and the EBITDA dropped by 41.7% to Aus$98m (€56m).  In bricks, a 4% price increase was insufficient to cover a 14% drop in volume and plants were closed.  Plasterboard volumes were off by 2% while prices were raised by 3% and roofing had a similar price and volume experience, while masonry, timber and windows did worse that this in volume terms. 

In Asia, turnover rose by 14.7% to Aus$219m (€127m) and the EBITDA recovered, posting an 87.5% increase to Aus$30m (€16.5m).  This was helped by better concrete prices in Indonesia, in spite of an 8% volume reduction.  In Thailand concrete volumes dropped by 21% and prices were off by around 5%.  The plasterboard joint venture with Lafarge experienced a 6% reduction in volumes and the net attributable profit was 26% lower at Aus$13m (€7.6m)

The business in the United States saw turnover drop by 33.1% to US$406m, which translated into an 18.8% drop in Australian currency to Aus$545m (€318m), the EBITDA falling into a Aus$61m (€36m) loss and the trading loss widening from Aus$27m to Aus$109m (€63m).  The volumes fell by a further 44% in bricks, by 39% in concrete tiles and by 38% in clay tiles.