Adelaide Brighton full year earnings on track, Australia

Adelaide Brighton full year earnings on track, Australia
04 October 2012

Adelaide Brighton has confirmed it is on track to meet its 2011-12 earnings guidance, underpinned by its exposure to the resource and infrastructure sectors.

Speaking to the Australian Financial Review, Adelaide Brighton managing director Mark Chellew said the group’s 2012 financial year net profit guidance was between A145m-155m. Although the group has been hit by a slowdown in the residential sector, it has reviewed its resources-based cement exposure and was not expecting any fall in cement or lime volumes.

"We read the newspapers like everyone else but we have gone through the projects we have now in our forecasts for the next two years in terms of cement volumes and we don't see any projects that we are aware of being postponed," Mr Chellew said at an analyst and investor site tour of its South Australian and West Australian assets.

Mr Chellew said the group supplied about 800,000t of cement to the West Australian market, with 150,000t of that directed to resources projects.

Mr Chellew said he expected cement demand to remain subdued in the medium term.

"Cement demand is definitely plateauing across Australia, to say it is weakening it is probably a little too early to say," he said. "Residential and non-residential still look pretty ordinary. The question mark is will this rate cut spur along residential and non-residential – my view is in residential it probably will."

Adelaide Brighton was assessing the viability of its clinker facilities in WA given the sustained strong Australian dollar and carbon tax.

"While we have not made any decision yet, we are evaluating the long- term clinker making facilities in Western Australia. We have to form a view on it," he said.

Published under Cement News