CSR profit rebounds as housing market booms

BUILDING products group CSR delivered a rebound in annual net profit and expects the housing market to remain solid with Homebuilder propping up the sector into 2022.

Annual net profit rose 19 per cent to $160m, against analysts’ consensus of $156m. Its building products unit posted an 8 per cent rise in earnings to $184m, with its earnings before interest and tax margin at 12 per cent from 10.7 per cent.

Stronger cost controls and operational efficiencies offset a slowdown in residential construction activity, down 4 per cent over the year. And overall revenues fell 4 per cent to $2.12bn with property earnings of $54m.

The company owns brands including Hebel, Monier roofing, Gyprock and Cemintel.

CSR — which also has a stake in the Tomago aluminium smelter in NSW — said its aluminium unit earnings slumped by 60 per cent to $23m, in line with previous guidance, and reflecting a sharp fall in aluminium prices at the start of the financial year.

Aluminium earnings for the 2022 financial year are expected in a $32m-$40m range. CSR will pay a final dividend of 14.5c per share after last year’s payout was axed due to economic volatility.

A special dividend of 9.5c per share was also paid after settlement of its Horsley Park industrial development.

An improved housing cycle is likely to underpin CSR’S earnings outlook, with Citi upgrading its Australian housing starts forecasts.

The broker said the pace of approvals had been running faster than anticipated, and it expected demand to remain supportive post Homebuilder given strong underlying fundamentals.

CSR said its pipeline of detached housing projects would be supported by Homebuilder starts, and extend into the 2022 calendar year.