Adbri on a high despite downturn fears
Adbri boss Mark Irwin has shrugged off concerns that the residential construction boom is quickly running out of steam, reporting strong demand for the company’s building materials as it looks to finalise a $2.1bn buyout from Irish giant CRH.
Rising interest rates and higher building costs have put a handbrake on buyer appetite, according to the latest ABS figures, with housing approvals falling 9.5 per cent in December.
However, Mr Irwin said that trend wasn’t playing out across the Adbri business – which supplies a range of building products such as cement, concrete, lime and industrial minerals.
“We’re not seeing any drop-off in demand for our product – we’re confident about that,” he said after handing down the company’s full-year results on Tuesday.
“If you read the official stats, building approval requests, statistically, have come off. But we’re not seeing it as it relates to demand for concrete.
“We think the market fundamentals are good, and to the extent that there is a temporary drop-off in approval requests, we think it’s going to come back.
“That’s why we’re confident that this year, in terms of volumes, will be the same as last year, with the exception of lime.”
Price increases and strong demand delivered a strong underlying result for Adbri in the 12 months to December, with underlying EBITDA up 31 per cent to $311m, on a 13.1 per cent increase in revenue to $1.92bn.
Statutory net profit after tax fell 9.5 per cent to $92.9m, with the previous year’s result benefiting from the sale of land at Moorebank and Rosehill.
The company has kept dividend payments on hold.