Adelaide Brighton expects to keep operating at full capacity

Adelaide Brighton expects to keep operating at full capacity
Published: 10 February 2005

Cement and lime producer Adelaide Brighton Ltd expects to keep operating at full capacity this year, but it might not be able increase it’s prices much in the near term. 

Adelaide Brighton today announced a 41 per cent jump in net profit to $81.45m for the year to December 31, 2004.  However this included a one-off $14m benefit from tax consolidation.  Excluding the benefit, net profit was up 17 per cent to $67.5m.  Revenue was up 10.5 per cent to $705.66m. 

Managing director Mark Chellew said it was a record net profit result from one of the company’s most challenging years, which included a takeover attempt by larger rival Boral Ltd that was eventually abandoned after intervention from the Australian Competition and Consumer Commission. 

"It put a lot of complexity into the business in terms of running the business at this time, in keeping the staff motivated," Mr Chellew told journalists. 

"It was probably the most challenging year for Adelaide Brighton for a number of decades, I would imagine." 

Another challenge during the year was the strong demand for cement in Australia. 

Adelaide Brighton’s manufacturing facilities produced record outputs and were at full capacity but there still wasn’t enough cement, forcing the company to source from overseas where prices are higher. 

"We see ourselves operating at full capacity and we see ourselves selling similar volumes of cement this year as last year," Mr Chellew forecast. 

"We see cement volumes essentially stable compared to last year and we see lime growth going forward." 

On the pricing front, he said he didn’t think Adelaide Brighton would likely lift its prices too much more in the near future, partly due to the softening of demand in New South Wales. 

Cement prices in Asia were expected to continue to rise while shipping costs were expected to remain high. 

Adelaide Brighton expects to increase its capital expenditure this year as it upgrades its Port Kembla mill and invests $28 million in its Hartley Quarry plant, to be brought on stream in 2006 to supply the western Sydney market.