Adelaide Brighton is on track for a small lift in annual profit as strong demand for cement from an active resources sector offsets a downturn in the New South Wales residential construction market. The cement and lime producer announced a 14.23 per cent rise in first half net profit to A$38.53 million. Managing director Mark Chellew said the company remains positive about the second half of 2005 and is on track to meet its full year profit guidance of A$82 million to A$85 million. The company reported a 2004 net profit of A$81.45 million.
Demand for cement is expected to continue at current high levels while demand for lime will increase by about 300,000t over the next five years, Mr Chellew said. "The softening in NSW has been ameliorated by our geographical spread and our exposure to the resources sector both in cement and lime," Mr Chellew told journalists.
"I think the outlook for the residential sector is at best flat in NSW - our view is it probably won’t get too much worse." The NSW government’s abolition of the vendor tax on investment properties was a good start, but it won’t fix a lacklustre market. "I think it will lead to an improvement slowly, but I think NSW has got more problems than just the vendor tax," Mr Chellew said.
Adelaide Brighton will continue to focus on the resources sector, particularly in Western Australia and South Australia. "There’s no doubt in our mind that the resource sector has definitely started kicking in very strongly and is driving the future of our business over the next five years," he said.