Boral sees benefits of restructuring

Following a year of cost cutting and rationalisation, Boral has posted a +3% growth in profit of AU$ 104 million (US$94 million) (before significant items) for the full 2013 financial year ended 30 June 2013.

The Australian heavy materials group also saw gains in sales revenue, up +6% to AU$ 5.29 billion (US$ 4.75 billion) and earnings before interest and tax (EBIT) (before significant items) increased by +14% to AU$ 228 million (US$ 205 million).

Significant items totalling AU$ 316 million (US$ 285 million) after tax loss largely related to asset impairments as a result of capacity rationalisation and permanent structural industry changes in Australia, as well as organisational restructuring and redundancy costs. This resulted in a reported net loss after tax of AU$ 212 million (US$ 190 million).

Boral’s CEO Mike Kane said that while Boral continued to face significant market and economic challenges, benefits from the group’s major cost realignment and restructuring programs are being progressively delivered as planned.

“Like the rest of the industry, Boral’s businesses have been contending with low levels of activity, unfavourable mix shifts in demand, increased competition and unrecovered costs associated with the carbon tax. However, in line with the turnaround strategy that I announced in late 2012, we have been relentless about reducing costs, generating cash and reducing capital expenditure, which positions Boral well as markets improve,” he said.

Boral’s Construction Materials & Cement division performed well with a +16% growth in EBIT as a result of major project activity, prior year acquisitions and property sales.

“The division’s performance is expected to remain strong in the year ahead despite substantially lower property sales and a slow down in major project work,” said Mr. Kane.