Goodwill impairment drives Texas Industries into loss

Goodwill impairment drives Texas Industries into loss
16 July 2009

In the financial year to the end of May, Texas Industries’ saw turnover decline by 18.4% to US$839.2m and the EBITDA fell by 29.1% to US$109.2m.

A 22.7% rise in the depreciation charge and a jump in net interest payments from US$2.5m to US$33.3m led to a 92.0% drop in the running profit before tax to US$7.7m. Once the exceptional items, notably a US$58.4m goodwill impairment on the cement plant in California, are taken into account, a pretax loss of US$30.4m emerged, compared with a profit of US$127.4m in the previous year.  Net debt at the end of May of US$522.0m gave a gearing level of 65.0%.

Cement volumes in the year declined by 19.9% to 3.66Mt (4.04Mst) and the turnover from cement fell by 21.7% to US$395.3m, of which Texas represented approximately 70%.  The average cement price declined by 3.0% to US$81.93/t (US$90.31/st), with a 14% drop in Californian prices being partially offset by a 2% improvement in the more important Texas market. 

Turnover in aggregates declined by 16.8% to US$237.5m as average aggregates prices improved by 7.1% to US$8.79 per tonne while volumes dropped by 24.6% to 14.94Mt (16.47Mst).  The ready-mixed concrete operations contributed a turnover 16.2% lower at USS309.4m as higher purchasing and transportation costs to some extent offset the drop in volumes of around a quarter.  Prices improved by 5.7 % to US$111.79/m3 (US$85.46/yd) while shipments fell by 24.5% to 2.22Mm³ (2.90Mm3). 
Published under Cement News