Boral upbeat on H1 profit

Boral (BLD) says it confident of delivering strong first-half net profit as favourable weather and strong volumes buoy the group's result, despite a slight delay in its plasterboard and ceilings joint venture with USG.

In a statement to the Australian Securities Exchange, Boral said it was expecting a first-half net profit after tax before significant items of around $90 million, subject to finalisation of the audit review. In the six months to December 31, 2012, Boral posted a net profit before significant items of $52.2 million.

"This result is underpinned by favourable weather conditions in Australia, strong volumes from major projects, a significant turnaround in the performance of the building products division and benefits from prior year restructuring activities."

In fiscal 2014, Boral said it expected earnings to be skewed to the first half because of lower contribution from major projects and a reduced contribution from Boral Gypsum following the move from a 100 per cent owned division to a 50% joint venture.

Boral also warned of significantly lower levels of expected profits from property sales for fiscal 2014, which in prior years have traditionally benefited the second half.

Boral also said it now expected to complete its plasterboard and ceilings joint venture with USG on or before February 28, a month behind the originally anticipated completion date of January 31.

The group said the delay was necessary to obtain all the necessary regulatory approvals.

Boral Limited and USG Corporation first entered into an agreement to form a strategic joint venture in October last year, promising it would deliver a portfolio of building products across Asia, Australasia and the Middle East.

Boral said the 50/50 joint venture, to be called USG Boral Building Products, would leverage the geographic footprints and technological expertise of both companies to create a $US1.6 billion partnership.