Lower dollar to lift CSR bottom line
"We've seen a significant correction in the value of the Australian dollar recently ... and that's a positive for CSR," Jeremy Sutcliffe told Thursday's annual meeting.
He said one of the lows for the year was the $196 million write-down against the value of the Viridian glass unit, the "bad" was the lack of any pick-up in construction sector activity, and the "good" was the improvement in shareholder return marked by a share price rise and the fact that its building materials arm outperformed competitors.
CSR shares closed up 2¢ at $2.29, extending a rally from a mid-June low of $1.95.
Over the past month or so some analysts have upgraded their recommendation for CSR, but the share price remains hamstrung by the price of aluminium, given the group's direct exposure to production of the metal.
Managing director Rob Sindel said the group expected to see 147,000 housing starts nationwide in the year to March 2014, with growth of up to 8 per cent expected in Western Australia and NSW.
Leading indicators are pointing to a recovery in housing construction, with rising building and finance approvals.
The group had "significant leverage to any upturn in the construction market activity and the aluminium price", Mr Sindel said.
Analysts said a revival in housing starts, the prospects of a turnaround at Viridian and growth at the Hebel building products unit might provide some upside to earnings in the near term.
Citi, however, maintained a "sell" recommendation on the stock.
Frequently Asked Questions about this Article…
CSR's chairman, Jeremy Sutcliffe, said the significant correction in the value of the Australian dollar is positive for CSR. The weaker dollar was highlighted as a clear upside after a year that included both setbacks and improvements in shareholder return.
One of the year's lows for CSR was a $196 million write-down against the value of its Viridian glass unit, which management flagged publicly at the annual meeting.
Analysts say CSR's share price remains hamstrung by the price of aluminium because the group has direct exposure to aluminium production, making aluminium prices a key influence on profits and investor sentiment.
CSR's building materials arm outperformed competitors during the period discussed, and that outperformance contributed to an improvement in shareholder returns and a rise in the company's share price.
Some analysts have upgraded their recommendations for CSR over the past month, but Citi remained cautious and maintained a 'sell' recommendation on the stock.
Managing director Rob Sindel said the group expects about 147,000 housing starts nationwide in the year to March 2014, with up to 8% growth in Western Australia and NSW. Leading indicators like rising building and finance approvals point to a recovery, and CSR says it has significant leverage to any upturn in construction activity.
Analysts noted that a turnaround at Viridian, growth at the Hebel building products unit, and a revival in housing starts might provide upside to CSR's earnings in the near term.
CSR shares closed up 2 cents at $2.29, extending a rally from a mid‑June low of $1.95, reflecting some of the positive developments and analyst attention described by management.
Call 1300 880 160
Start a chat
Schedule a call
