The company’s shares plunged as much as 19 per cent in early trade, to notch its biggest intra-day percentage drop since May 2004.
The move underlines troubles plaguing many companies in the construction and housing sector, amid a sharp drop in the country’s property values that has crimped consumer spending.
In a statement today, Adelaide Brighton said it expected underlying net profits after tax, excluding property, of $120 million to $130 million for the year ended December 31, adding that it would not declare an interim dividend for the period ending June 30.
“The revised guidance is a consequence of a further softening of conditions in the residential and civil construction markets, continued competitive pressure in Queensland and South Australia, sustained increase in raw material costs, and one-off shipping costs associated with the cancellation of import orders …given the softening volumes in Victoria,” the company said.
Adelaide Brighton said it would record a non-cash impairment of no more than $100 million pre-tax for the six months ended June 30, representing no more than 5 per cent of total assets, but the write-down would not affect underlying profit.
In May, Adelaide Brighton slashed its full-year underlying net profit after tax figure, expecting it to be about 10 per cent to 15 per cent lower than the previous year’s $190.1 million.
It comes after Commsec’s latest State of the States report, released Monday, showed SA slipped from fifth to sixth position nationally when measured against eight economic performance indicators.
SA swapped positions with Queensland, with the two states highlighted by Adelaide Brighton as centres of “competitive pressure”.
The report said construction activity in South Australia fell by 2.5 per cent from a year ago, while dwelling starts fell by 25.4 to a five-year low.
South Australia also ranked sixth in equipment sales.
Slowing building activity was also reinforced by today’s Australian Bureau of Statistics Building Approvals figures, showing the number of dwelling units approved dropped by 25 per cent across the country in the year to June, in seasonally adjusted terms, or 20 per cent in trend terms.
South Australia’s dwelling unit approval’s dropped by 0.8 per cent in June.
– with AAP
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