Boral shares leap on outlook

Shares in group surge to an almost 3-year high on first-half earnings.

Boral (BLD) has widened its first-half net loss as the cost of its yet to be completed joint venture with USG weighed on the group's results.

Investors responded well to the first-half report. At 1035 AEDT, Boral shares were 5.2% higher at $5.26, against a benchmark index lift of 0.49%. In earlier trade, Boral shares hit as high as $5.33, their highest point since reaching $5.42 on March 9, 2011.

In the six months to December 31, Boral posted a net loss of $26.3 million, a 4% widening on its net loss in the first half of fiscal 2013 of $25.3 million.

In the same period, total revenue was $2.87 billion, a 3.6 per cent lift on the $2.77 billion recorded in the previous corresponding period.

The group will pay a fully-franked interim dividend of seven cents on March 24, to shareholders on the register at February 24.

Boral said due to the timing of its joint venture with USG, the first half results included significant items totalling $117 million after tax loss.

"This loss largely represents a non-trading item relating to the reclassification and revaluation of the Boral Gypsum net assets as 'held for sale' assets," the group said.

Once the USG joint venture is compelted later this month, Boral said the loss is expected to be offset by deferred foreign exchange gains and will result in a profit in the second half of this financial year, assuming an Australian/United States exchange rate of US89 cents.

Boral said it expects a significant skew of earnings to the first half of the year compared to the second half due to  lower contribution from major projects, reduced contribution from Boral Gypsum following the move from a 100 per cent owned division to a 50 per cent joint venture, as well as significantly lower levels of expected profits from property sales for fiscal 2014.