Manufacturing News

Boral slumps makes clear fallout from US disasters

Manufacturing News

The FY22 yearly results for building products group Boral make clear the massive size of the haircut the company suffered through its fumbled foray into the United States market.

The company reported total revenue in FY22 was 26.9 percent below the previous financial year’s $5.3 billion at $3.908 billion.

It included revenues from now discontinued operations of $952 million, suggesting the company has further to fall before it hits the bottom.

There was even little comfort in revenue from continuing operations, where revenue was up 1.1 percent to $2.956 billion.

Profit from these continuing operations before interest and tax was down 38 percent to $112 million.

Earnings before interest and tax were $112 million.

The company’s earnings were impacted by increases in energy and transport costs, Covid-19 shutdowns and rain in the eastern states, – resulting in a $58 million hit.

The haemorrhage comes from the rationalisations forced on the company from its performance in the US.

In April the company moved to examine the future of its US fly ash businesses and previously it agreed to sell its half share in a key building products venture USG Boral for $1.43 billion.

USG Boral was the company’s venture with Germany-based Gebr Knauf KG, which includes the important plasterboard businesses in Australia, New Zealand, Asia and the Middle East.

The company said in its annual report that during the year it completed ‘the strategic realignment’ of Boral’s portfolio to focus on its core Australian construction materials business.

“However our continuing operations faced a number of challenges”.

The company said it was responding with pricing actions, accelerated overhead cost reductions and energy cost mitigation activities.

During the year:

  • A 30 million federal government grant was awarded for it to use Australian industrial technology company Calix’s low-carbon emissions cement production technology
  • Lower carbon concrete production penetration reached 19 percent of production
  • And 58 percent of the company’s operational wastes were diverted from landfill.

Late yesterday afternoon Boral shares were up 2.4 percent to $2.96.

Seven Group holds a 69 percent share in Boral.

Picture: Boral

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