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Carbon tax removal a plus for Adelaide Brighton


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Construction materials and lime producer Adelaide Brighton has produced record yearly revenue due to its capital expenditure program.

The company’s revenue for the year to December 31 was up 3.8 per cent, on the previous corresponding period, to a record $1.23 billion.

Net profit after tax for the ear was $151.1 million, a drop of 1.2 per cent on 2012.

However, excluding a $7.6 million one-off gain in the previous corresponding period, net profit was up 3.9 per cent.

Managing director Mark Chellew said Adelaide Brighton was starting to see returns from its capex program in cement and lime and given subdued volume growth in 2012 the company was yet to realise the full extent of the investment.

“Modest growth in underlying net profit on healthy sales is encouraging given we are yet to see the full benefit to revenue and margins of our major capex program and the recovery of residential demand has only just begun,” he said.

“Adelaide Brighton’s cement and lime exposure to resources and infrastructure again supported shareholder returns despite commercial and residential building activity being weak for much of the year.”

The company expects demand for cement and lime in the coming year to be similar to 2013.

It also expects to consolidate returns from its cement mill upgrade at Birkenhead in South Australia to be consolidated in 2013.

Mr Chellew said the removal of the carbon tax should assist the company if it goes ahead during 2014.

“The impact of the carbon tax in 2013 was $4.2 million after tax. The removal of the carbon tax by 1 July 2014 could provide an after tax benefit of circa $2 million compared to 2013,” he said.

“However there is political uncertainty around the repeal process and a significant component of these savings are dependent on a reduction in energy costs from suppliers.”

At 1201 AEDT shares in Adelaide Brighton gained nine cents, or 2.21 per cent, to $4.16.

In other results announced today Adelaide-based gas distributor Envestra Ltd posted a 47 per cent rise in profit to more than $87 million.

The company said the result reflected increased revenue from tarriff adjustments courtesy of the Australian Energy Regulator.

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