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CSR navigates tough conditions, improves building products EBIT

Manufacturing News

Building products manufacturer CSR has navigated difficult economic conditions to significantly increase EBIT profit from the building sector in the latest half year to 30 September.

Net profit after tax (NPAT) was down 15 percent to $94 million comparted to the previous corresponding period with strong growth in building products offset by a lower contribution from property activities and the company’s aluminium interests.

$44 million of property earnings are contracted for the second half year, while aluminium was hit by cost volatility, particularly in energy.

This compares to earnings including $28 million from property and $16 million from aluminium.

CSR Managing Director and CEO Julie Coates said: “CSR’s core building products business has performed well with record first half earnings as the team executed to capture the positive market opportunity and offset inflationary pressures.

“The group result was impacted by input cost volatility.”

While overall trading revenue was up five percent to $1.4 billion, operational performance saw earnings before interest and tax (EBIT) of $126 million for the half.

The building products businesses recorded EBIT up 18 percent to $165 million with ‘price discipline’ as well as growth in volumes for Gyprock, Hebel and Badford.

“Improved factory efficiency and operational performance supported the strong result with EBIT margin improving 100 basis points to 16 percent and return on funds employed increasing to 31 percent from 28 percent.”

Coates said the company’s strategy had good momentum, with the detached residential construction pipeline 50 percent above historical averages.

“While completions are now marginally higher than commencements, lead indicators suggest the stabilisation of approvals.”

During the half CSR acquired design-led acoustic finishes and textiles business Woven Image for $43 million.

Further reading:
CSR buys Woven Image, broadens commercial offering

Picture: CSR Hebel

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