AdBri bets on bounce back after first-half profit fall
THE cement and lime manufacturer Adelaide Brighton is banking on a resurgent second half amid a tough housing market after a 10 per cent fall in its first-half profit.
THE cement and lime manufacturer Adelaide Brighton is banking on a resurgent second half amid a tough housing market after a 10 per cent fall in its first-half profit.The company reported a net profit of $61.5 million in the six months to June, down from $68.8 million in the previous corresponding period.Although it expects residential construction activity to decline in the next few months, the company's managing director, Mark Chellew, said he remained confident of delivering a full-year net profit of between $144 million to $152 million because of AdBri's greater exposure to the infrastructure and resources sector. The company reported a net profit of $151.5 million last year."I do accept that the residential and non-residential [construction market] is extremely weak throughout Australia," Mr Chellew said."To be fair it is a bit of a crystal ball but we're still confident enough to give that guidance even with the worsening residential housing outlook over the next three months."He said first-half revenue was also adversely affected by one-off problems, which he did not expect to be repeated, with two large customers in Western Australia and the Northern Territory. Seventy per cent of AdBri's revenues are generated from cement and lime sales, giving it greater exposure to the engineering and mining sectors, and making it more resistant to a housing downturn than other building materials companies.Mr Chellew said the carbon tax would slice $5 million off its full-year revenue before mitigation. But a greater risk was the strength of the dollar, which made competing imports of cement and lime cheaper.