Adbri grows on construction, mining recovery

Cement and lime manufacturer Adbri’s first half, 2022 profit result reflects the underlying strength of the construction sector and the recovery underway in the mining industry, as well as the ability of companies to recover some of recent cost increases from customers through higher prices.

The company, formerly Adelaide Brighton, reported underlying net profit after tax down 1.3 percent to $54.3 million on revenues up eight percent to $812.4 million in the half year ended 30 June.

Adbri’s Managing Director Nick Miller said: “We have delivered another period of top line growth, with increasing volumes across the majority of our product lines as strong demand continued in the construction and mining sectors, despite significant disruption to the business as a result of severe weather events on the east coast of Australia.

“The company has actively managed its pricing strategy to partially mitigate significant inflationary pressures while continuing to execute our cost reduction program to deliver savings and protect earnings.”

Adbri’s cost-our program delivered $7.5 million in gross savings in the half, only partially offsetting inflationary pressures.

However it was able to achieve some out of cycle price increases, with the result also impacted by higher costs for raw materials, shipping, transport and fuel.

Miller said Adbri entered the second half in a robust financial position to advance key strategic initiatives including its Kwinana, Western Australia Upgrade project (pictured) and ‘the Kalgoorlie kiln definitive feasibility study’.

Adbri and Cockburn Cement Limited are spending $199 million on a state-of-the-art facility that will consolidate Adbri’s two existing cement production sites at Munster and Kwinana in Perth into a single operation servicing the WA market.

Miller said: “We expect growth in underlying earnings for 2H22, driven by increased contributions from cement, concrete, aggregates, masonry, joint ventures and recent business acquisitions, subject to weather, inflationary headwinds and traction with out-of-cycle pricing.”

Picture: Adbri/Kwinana upgrade project

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