Property propels Brickworks’ record profit

Building products manufacturer Brickworks Limited has announced record underlying Net Profit After Tax (NPAT) from continuing operations of $410 million for the half-year ended 31 January 2023, up 24 percent on the previous corresponding period.

Statutory NPAT was $354 million, down 38 percent, a figure affected by the previous year’s one-off profit with the disposal of Washington H Soul Pattinson shares upon its merger with Milton.

Underlying earnings before interest, tax and depreciation (EBITDA) from continuing operations was $607 million, up 25 percent.

The Sydney company’s property division was a standout, including the sale of its Oakdale East Stage 2 site into an Industrial JV Trust with property group Goodman Group.

A strong uplift in market rent for prime industrial property underpinned a revaluation gain, despite the impact of increasing capitalisation rates.

Across the rest of the portfolio, the contribution from Investments was higher, and earnings from Building Products was relatively steady.

Building Products Australia EBITDA was down six percent to $50 million on revenue of $364 million (up 11 percent).

The decrease in earnings was primarily due to a decline in Bristile Roofing and Austral Bricks Western
Australia, with most other business units recording improved earnings.

Managing Director Lindsay Partridge said: “Sales have remained relatively robust across most businesses, despite a decline in new home sales.

“This is due to a large backlog of work from previous government stimulus, supply chain issues and tightness in the labour market, all of which have resulted in delays and extended construction timelines across the industry.”

Earnings within Austral Bricks were higher than the prior period, on the back of a strong performance in New South Wales and Victoria.

Improved earnings were also recorded by Austral Masonry, with a new masonry plant at Oakdale East (pictured) in Sydney fully commissioned during the period.

Southern Cross Cement delivered a strong uplift in earnings, and a new cement supply contract that was secured in December is set to further reduce costs.

An ambitious capital investment programme across the company will be capped off by the completion of a new Sydney brick plant within the next six months.

In North America, sales revenue of $220 million in the first half was up 18 percent on the previous corresponding period, driven primarily by strong growth in sales to the multi-residential segment and through the vertically integrated retail division.

Picture: Richard Crookes Constructions/Oakdale East