Boral profits fall amid building slowdown, higher costs

BORAL has halved its interim payout on a 40 per cent first-half profit dive, with the troubled building materials firm weighed down by higher costs and weak housing construction activity in Australia and South Korea.

Boral’s net profit plunged by $91.5 million to $136.5 million in the six months to December 31, down from $228 million a year ago, as the firm booked $20 million in costs associated with restructuring, rightsizing and integration costs, as well as USG Boral/Knauf transaction costs.

Revenue from continuing operations was up 2.2 per cent to $2.960 billion, though total revenue dipped to $2.989 billion from $2.990 billion last year.

Boral said its Australian operations were hurt by lower concrete volumes due to a 23 per cent decline in housing starts.

Local earnings also suffered as a result of subdued pricing, higher costs associated with outages at Peppertree Quarry and Berrima Cement and the summer’s bushfire crisis. This was partly offset by $30 million in cost saving and property earnings of $29 million.

The company will pay an interim dividend of 9.5 cents, 50 per cent franked, down from the 13.5 cents it paid out a year ago.

As flagged earlier this month, Boral faces a number of headwinds going into the second half.

The company is searching for a new chief executive after outgoing boss Mike Kane announced he would be stepping down after seven years in charge following an accounts scandal at Boral’s North American windows business.

An investigation found employees overstated pre-tax earnings by $US24.4 million ($36.6 million) at the windows division between March 2018 and October 2019.