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Adelaide Brighton reports net loss, expects construction recovery in 2021

Business

SA-based construction materials company Adelaide Brighton Ltd has reported reduced sales and a net loss after tax, telling investors a recovery in residential construction is more than a year away.

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The company’s revenue for the half-year to June 30 was $744.7 million, down 6.3 per cent from the same time last year, when the company made $806.3 million.

Cement sales also decreased by 8.6 per cent and concrete volumes dropped 7.8 per cent compared with the same period last year.

There was a bright spot: revenue from lime sales grew slightly, from $82 million in the first half of last year to $83 million in the latest half-year results.

Australia’s second-largest cement producer this morning reported underlying profits of $55.3 million and a net loss after tax of $17.9 million, following a non-cash impairment charge of $69.9 million.

The company suffered its biggest intra-day share price percentage drop in more than a decade last month when it announced it had scrapped its interim dividend, blaming lower demand for its products on a slowdown in housing and civil construction.

CEO Nick Miller said in a statement to the ASX this morning that the company is expecting residential construction to continue to decline in Australia until 2021, but demand for mining and infrastructure construction materials to pick up in the “near term”.

“Infrastructure spending is expected to remain high with a significant number of projects commencing or in planning for commencement,” the company statement says.

“This increased demand is expected to flow through to the business in 2020.”

He argued that the company was in a strong position to weather sliding demand for construction materials.

“Adelaide Brighton is a durable business with strong share in its key markets,” he said.

“While we expect demand conditions to remain soft in the near term, the company is well placed to weather the cycle and maintain and grow our strong market position.”

Miller said the company was pursuing investment and growth opportunities and reducing costs.

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