Rising cost hits Hardie

HIGHER production costs have contributed to a 34 per cent fall in quarterly profit for building products maker James Hardie.

The company yesterday said its sales in the three months to June were up 6 per cent from a year ago, but its net profit of $72.5 million was down from a year ago.

James Hardie said its earnings margins were pressured by inefficiencies and higher production costs.

It said it expects to make an operating profit of between $303 million and $353 million this financial year, excluding asbestos payments. That is weaker than analysts’ forecasts of $313 million-$375 million.

James Hardie shares dropped 5.8 per cent to $17.90.

Chief executive Louis Gries said almost all of the company’s input costs in North America, where the majority of its earnings are generated, were higher than a year ago.