Adelaide Brighton Profit Goes Up

Adelaide Brighton’s (ABC) net profit goes up by 6.1%. The company projected weakening levels of demand for cement during 2009 driven by the decline in commercial and residential construction activity across all markets. Revenue for the year to December 2008 rose 15.1% to $1.022 billion, although the company has warned the year ahead would be marked by tougher economic conditions with construction activity to decline by as much as 20%.

Consensus estimates, based on a survey of 9 brokers, had flagged a net profit excluding exceptional items of $118.47 million. Stock had risen 2.8% or 4.5 cents, to $1.665 by this afternoon. The Adelaide-based company, which supplies cement and lime to the construction, engineering and infrastructure sectors in Australia, expects its cement sales to decline by about 10 per cent in 2009. Managing director of Adelaide Brighton, Mark Chellew said, “At this stage it is not possible to predict the extent of this downturn. Historical cycles have seen declines in the range of 10% to 20%”.

Looking to the record 2008 result, Chellew said cement sales volumes increased by 9% and were particularly strong in Queensland and Victoria where increased demand was met by additional imported clinker and cement taken through the Sunstate Cement and Independent Cement and Lime joint ventures. Mark Chellew said the positive performance for calendar 2008 was driven by growth in sales volumes and prices, together with sustained operating efficiency. “Demand in all markets except New South Wales showed fairly consistent growth throughout the year with regional weakness in residential construction being complemented by further growth in the engineering and infrastructure sectors”, he said.

The Earnings per share of the company for the full year was 22c compared to 21c for the pcp. A fully franked interim dividend of 8.5 cents, payable on 22 April 2008 has been declared. This brought the full year dividend to 15c per share, the same level as the pcp, before special dividend. It has been a tough six months for the nation's builders and building material suppliers with the global economic crisis and slump in housing driving lower demand.