Adelaide Brighton Ltd has forecast earnings to rise to between A$92 million and A$96 million this financial year. Adelaide Brighton managing director Mark Chellew said the company expects further profit growth above its record calendar 2005 net profit of A$87.8 million before tax consolidation benefits.
"Assuming no unforeseen circumstances, we expect full year net profit after tax to be between A$92 million to A$96 million," Mr Chellew told the company’s annual general meeting in Adelaide. “In addition to this we expect a further A$1 million to A$2 million additional benefit from tax consolidation." However, Adelaide Brighton reported a 2.6 per cent decline in bottom line net profit to A$90.92 million in 2005.
Mr Chellew told journalists the 2006 profit forecast was "an estimate achievable". Meanwhile, shareholders heard cement markets continued to grow in Western Australia and had held up well overall in South Australia, Victoria and Queensland. "In New South Wales demand remains weak due to the continuing softness in the residential sector, though it is believed that the market has now bottomed with some improvement possible in the final quarter of this year," Mr Chellew said. Selling price increases were being progressively realised in most markets, which would principally benefit the second half result, he added.
But the company’s first half result, due to be reported in August, would be negatively impacted by the bringing forward of maintenance projects. Mr Chellew said that due to a significant increase in demand, gas supplies in WA had reached pipeline capacity causing supply constraints and cost increases to large industrial users. He said several of the Munster plant’s second half annual shutdown projects had been brought forward to the first half.
"The acceleration of these maintenance projects along with some major maintenance upgrade of the lime kiln will, however, have the impact of suppressing the company’s first half result in terms of cost and output and therefore profit when compared with the first half of 2005, but provide the basis for the corresponding improvements in the second half year result," Mr Chellew said.
Adelaide Brighton chairman Malcolm Kinnaird said the company was exploring further growth. "The answer is yes, there are many," Mr Kinnaird said when asked by journalists if the company was exploring organic and strategic growth options. "Unless you are actually considering both the real and the fanciful, you are never actually going to get a real opportunity emerge, there are a few out there."