Boral profit slumps 40% as construction lockdowns, rains raise costs (updated)

Boral

23/08/2022 01:35

(Adds forecast details, past guidance, analyst comments)
    Aug 23 (Reuters) - Australia's Boral Ltd  BLD.AX  reported a
40% drop in annual profit on Tuesday, as construction lockdowns
and heavy rains and floods in New South Wales and Queensland
increased costs for the building materials maker.
    The company sees a high risk of further adverse impact in
the 2023 fiscal year due to exceptional rainfall, but expects
revenue to rise from higher construction demand.
    "BLD (Boral) guiding to revenue as opposed to profit 
(implies) some uncertainty in cost and one-off recovery,"
analysts at Citi said. 
    Boral, which spent last two years selling its U.S.
businesses, reported a net profit before significant items of
A$149.7 million ($102.93 million) for the year ended June 30,
compared with A$250.7 million a year ago.  urn:newsml:reuters.com:*:nL4N2UC0L2  
    "We expect Boral to benefit from out-of-cycle national price
increases to offset higher energy and other input costs,"
analysts at Moody's Investors Service said.
    Boral in May had forecast underlying earnings before
interest and tax (EBIT), excluding the property business, of
between A$145 million and A$155 million due to higher energy
prices.  urn:newsml:reuters.com:*:nL3N2XA01U
    "Industry-wide construction lockdowns and exceptional
rainfall, particularly in New South Wales and Queensland,
curtailed volumes and significantly impacted margins," Chief
Executive Officer Zlatko Todorcevski said.
    Todorcevski is set to leave the company in December and will
be replaced by Vik Bansal, a former chief executive of
ASX-listed Cleanaway Waste Management  CWY.AX .  urn:newsml:reuters.com:*:nL4N2XU3DP 
    Shares of Boral were down 0.7% at A$2.87 in early trade,
while the broader market  .AXJO  was down 0.5%.
    
($1 = 1.4543 Australian dollars)

 (Reporting by Harshita Swaminathan; Editing by Subhranshu Sahu)
 ((Harshita.Swaminathan@thomsonreuters.com;))