CSR profit weighed down

Glass, power prices shatter near-term guidance

BUILDING product company CSR’s full-year profit has been hurt by higher power prices and losses linked to the sale of its troubled glass business, while property market uncertainty is clouding its near-term guidance.

The company’s share price slipped as much as 4.1 per cent yesterday after it announced net profit for the year to March 31 had fallen by 59 per cent to $78 million.

The result was weighed down by higher electricity costs at its aluminium business and a $61 million loss associated with the sale of Viridian

Glass in January.

CSR shares were 1.47 per cent lower at $3.34 at close yesterday.

Chief executive and managing director Rob Sindel (pictured) said the company’s building products business performed well despite the residential construction market slowing, but he could not provide a definitive near-term outlook amid expectations of further uncertainty. He said while the market had been hurt by a credit squeeze, the long-term outlook was more positive on expectations of continued population growth and the impending end of the federal election campaign.

“That’s why we think about it over the next three to four years (instead of) over the next 12 months,” Mr Sindel said yesterday.

“These things are usually pretty short and sharp … while ever we maintain high employment levels and we get through the noise of the election, we expect these things to pick up.”

CSR said revenue from continuing operations for the year rose 4 per cent to $2.32 billion, but revenue from its discontinued glass unit fell by $50 million, or 13 per cent, to $318.9 million.

CSR sold Viridian to Crescent Capital Partners in January for $155 million.

Earnings from continuing operations fell by 17 per cent to $265 million due to higher electricity costs in aluminium, which delivered $36.6 million in EBIT down from $79.5 million last year.

The company has cut its final dividend by half a cent to 13 cents, partially franked.

Meanwhile, the search continues for a successor to Mr Sindel, who has signalled his intention to step down this year.

CSR said a new appointment was expected to be announced prior to the annual general meeting, set for June 26.