Adelaide Brighton Ltd Chairman Malcolm Kinnaird has said that the company expects its earnings this fiscal year to fall by up to 13% because of a continued downturn in Australian construction.
The Adelaide-based company, the nation’s largest lime producer, expects its net profit in the year ending Dec. 31 to be within the range of A$105 million to A$115 million, he told shareholders at their annual meeting in Adelaide.
In February Adelaide Brighton flagged lower earnings this year because building activity was being constrained by tight credit markets and low consumer confidence.
It earned A$120.8 million on sales of A$1.02 billion in fiscal year 2008.
Adelaide Brighton has ridden seven years of continued sales and earnings growth by expanding into Australia’s eastern states to compete with Boral Ltd. and privately held Cement Australia Pty, whose investors include Holcim Ltd., Cemex SAB de CV and HeidelbergCement AG.
The company is preparing for cement demand activity to fall between 10% and 20% in the next 18 months and lime demand to fall by about 2% to 3% this calendar year, Kinnaird said.
In the year to date cement demand down by about 8%, he said. Adelaide Brighton has pushed through cement price increases this year and is seeking to boost lime prices to recover rising costs, Kinnaird said.
An increase in residential building has been stimulated by the federal government’s first homeowners grant but increased government spending on infrastructure "is unlikely to have a material impact until the final quarter of this year," he said.