Rinker posts 12% HY profit rise

Rinker posts 12% HY profit rise
Published: 09 November 2006

Rinker Group Ltd has delivered a 12 per cent rise in interim net profit amid a downturn in the US housing market, as it fights a $US12.8bn ($A16.8bn) takeover bid from Cemex.

The Australian building products maker, which maintains the Cemex offer materially undervalues the company, today announced a 12.3 per cent rise in first half net profit to $US410.4m ($A531.85m).

The improvement came despite deteriorating residential housing markets in Australia and, more importantly, in the United States, where Rinker earns about 80 per cent of its revenue.

The building materials company is predicting strong infrastructure and commercial construction sectors, which account for about half of total group revenue, to continue to partially offset the impact of sagging residential construction.

Nevertheless, it warned investors that given the magnitude of the housing correction and uncertainty in US housing markets, earnings for the full year would be at the lower end of its previous guidance range of 84 to 90 US cents per ordinary share.

Last year Rinker recorded earnings per share of 80 US cents.

Rinker said the forecast made today assumed a further modest deterioration in housing in Florida.