Ailing glass division pushes CSR into the red

CSR has warned its glass division will continue to be a drag on its performance in the year ahead, despite a $196 million provision booked against it in the latest financial year.

The difficulties were compounded by an across-the-board slump caused by the weak home building market, which pushed CSR into the red in the year to March, resulting in a net loss of $146.9 million. This reversed the profit of $76.3 million earned a year earlier.

The loss per share stood at 29¢, compared with a profit of 15.1¢ a share a year earlier.

The company said the glass division would report an "improved result" this financial year, but the full benefits of its restructuring, and associated job losses, would not be felt until 2014-15.

CSR said it expected a slight improvement in the housing market this financial year, following a difficult year, particularly in the important Victorian market, which slumped 13 per cent after three years of growth. This was in contrast to the 1 per cent rise in NSW and the 10 per cent bounce in Queensland, although off a low base.

Multi-residential housing also declined, but the Sydney and Melbourne markets remained "reasonably strong", it said. This sector now accounts for 40 per cent of all housing starts, up from about a third, historically.

Pretax profit at the building materials division was $77.4 million, down 11 per cent, while the Viridian glass division posted a loss of $38.8 million, double that reported a year earlier.

The consolidation of Victorian glass operations at Dandenong has resulted in 37 jobs being cut. In NSW, a similar move will lead to the loss of 170 jobs.

The aluminium division's pretax profit fell to $38 million, hurt by lower hedging profits and the stronger Australian dollar.

The property division made no contribution to the result. Work is under way on a 533-lot residential project at Chirnside Park in Melbourne, the first development in the area for more than a decade. This is expected to deliver revenue of $155 million in six stages over the five-year development period.

CSR had forecast a net profit of between $30 million and $34 million, before writeoffs and provisions. The final figure was $32.7 million, down from $90.7 million.