Australia’s Adelaide Brighton Ltd announces its 2013 financial results

Byzhangli

Updated Fri, 21 Feb 2014 00:00:00 GMT

Australia’s Adelaide Brighton Ltd has released its financial results for 2013. The company’s net profit after tax declined by 1.2% y/y to AUS$151.1 million. However, excluding an AUS$7.6 million one-off gain in pcp, net profit increased by 3.9%. Revenue improved by 3.8%, rising from AUS$1.183 billion in 2012 to AUS$1.228 billion in 2013. Meanwhile, operational improvement measures resulted in benefits totalling AUS$20.2 million.

Managing Director of Adelaide Brighton, Mark Chellew, stated: “Modest growth in underlying net profit on healthy sales is encouraging given we are yet to see the full benefit to revenue and margins of our major CAPEX programme and the recovery of residential demand has only just begun. “Adelaide Brighton’s cement and lime exposure to resources and infrastructure again supported shareholder returns despite commercial and residential building activity being weak for much of the year.”

“We are starting to see returns from our CAPEX programme in cement and lime although, given subdued volume growth in 2013, we are yet to realise the full benefits of this investment. Lime volume growth was held back by the weak gold sector and import pressures. However, margins strengthened and our recent investment in the business underpins its long-term competitive position and sustainability.”

The company’s cement, ready-mix concrete, aggregates and masonry sales were affected by low building activity on Australia’s east coast, as well as by cost pressures. However, Adelaide Brighton Ltd invested AUS$112 million in efficiency, sustainability and environmental performance improvements across its cement and lime businesses. This investment added a significant amount to the AUS$20.2 million in operational improvements achieved in 2013.

Going forward

In 2014, the group expects cement and clinker demand to remain in line with 2013. Lower demand in south Australia and the non-residential sector is likely to be offset by activity in western Australia and the Northern Territory, along with improvements in the residential sector. The company also expects mill upgrade work at its Birkenhead site in south Australia to provide consolidated returns this year.

Lime sales volumes are predicted to be similar to 2013. Weak demand from gold producers will be mitigated by rising demand from the alumina sector.

“The impact of the carbon tax in 2013 was AUS$4.2 million after tax. The removal of the carbon tax by 1 July 2014 could provide an after tax benefit of circa AUS$2 million compared to 2013. However there is political uncertainty around the repeal process and a significant component of these savings are dependent on a reduction in energy costs from suppliers,” added Chellew.