James Hardie posts 92% earnings fall
Chief executive Louis Gries said the building products maker expected the housing market to be flat to slightly higher.
"The operating environment in Australia is likely to remain relatively subdued and the company is not anticipating any substantial increase in net sales this calendar year," he said.
Recent interest rate cuts had prevented further declines in the housing market, he said.
James Hardie posted a net profit of $US45.5 million for the year to March 31, down 92 per cent. Full-year net profit fell significantly because of changes to the company's asbestos liabilities and a legal battle with the Tax Office.
The previous year's profit was boosted by a $US485.2 million benefit from a legal victory against the ATO in March 2012. Net operating profit, excluding legal and asbestos-related issues, was down 2 per cent to $US140.8 million.
Full-year operating earnings in the Asia-Pacific fell due mainly to strong competition and weak housing markets in Australia and the Philippines. Operating earnings from James Hardie's US and Europe operations steady and sales higher, amid improved conditions in the US housing market.
James Hardie shares were 9¢ lower at $10.36.
Frequently Asked Questions about this Article…
James Hardie’s full-year net profit to March 31 was $US45.5 million, down 92% largely because of changes to the company’s asbestos liabilities and a legal battle with the Tax Office. The prior year included a one-off $US485.2 million benefit from a legal victory against the ATO, which made this year’s comparison much weaker.
Net operating profit excluding legal and asbestos-related issues was $US140.8 million, down about 2% from the previous year, according to the company’s report.
James Hardie said it expects the housing market to be flat to slightly higher and does not anticipate any substantial increase in net sales this calendar year. The company described the operating environment in Australia as likely to remain relatively subdued.
Yes. James Hardie said recent interest rate cuts have helped stabilise the housing sector and prevented further declines, but the company still does not expect a major improvement this year.
Full-year operating earnings in the Asia‑Pacific fell, mainly due to strong competition and weak housing markets in Australia and the Philippines. Operating earnings in the US and Europe were steady and sales were higher, supported by improved conditions in the US housing market.
The main one-off items were changes to asbestos liabilities and costs related to a legal dispute with the Tax Office. By contrast, the prior year benefited from a $US485.2 million legal settlement in the company’s favour.
The article reported James Hardie shares fell by 9¢ to $10.36 on the news of the weaker full-year result.
Key takeaways from the report are that a large part of the earnings fall was driven by accounting and legal items (asbestos liabilities and the ATO dispute), underlying operating profit fell only modestly (about 2% excluding those items), and the company expects a flat to slightly higher housing market with no substantial net sales growth this year amid a subdued Australian operating environment.
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