Adelaide Brighton promises further increases after 1H earnings rise 12 per cent

Adelaide Brighton promises further increases after 1H earnings rise 12 per cent
23 August 2007

Adelaide Brighton Ltd has raised its full year guidance on expectations of greater demand for cement and lime.  
The company today posted a 12.1 per cent increase in first half net profit to $44.5m.  
"Based on our strong first half performance and immediate outlook, we have raised our 2007 full year net profit after tax forecast to a range of $107m to $112m," managing director Mark Chellew said.  
"We believe the potential cement demand is going to increase by about 10 to 15 per cent over the next three to five years and lime demand is going to increase by about 30 per cent with improved margins."  
Adelaide Brighton reported a 13.4 per cent increase in revenue to $413.9 million, and 19.7 per cent rise in earnings before interest and tax (EBIT) to $71.1 million.  
Mr Chellew said growth was set to continue as demand for lime and cement increased.  
"Demand from the resources, commercial and engineering and infrastructure sectors and the recovery in New South Wales housing sector (are) the principal drivers of this growth," he said.  
"This is augmented by a positive growth outlook for lime demand, and a sound overall pricing and margin environment which reflects the strength of the company’s competitive positioning, its long term imported clinker supply contracts and its geographical spread." 
Mr Chellew said the company had been largely unaffected by the slump in the NSW market, or by the sub-prime mortgage crisis in the US.  
"We think NSW is still relatively depressed ... (but) we’re not exposed to the NSW market as much as the others so we’re fairly relaxed our position ... Queensland and WA are very, very strong," he said.  
"And as we have no operations overseas, we have had no exposure whatsoever (to the subprime crisis in the US)," he said.  
The company declared a fully franked interim dividend of six cents, up from an interim dividend of five cents in 2006.  
Published under Cement News