And building products group Boral (BLD) produced a mixed update yesterday – a sharply higher first half profit and a warning of a weaker second half.
As a result the shares dipped 2c to $4.70, which wasn’t too bad an outcome given the volatility in the wider market and the way investors have been punishing companies which produce poor to mixed earnings guidance updates.
Boral said it expects its net profit for the six months to December 31 to be in the order of $90 million, a significant improvement on the $25 million loss recorded for the same period a year ago.
The company said favourable weather conditions, strong volumes from major projects and a significant turnaround in its building products division contributed to the profit growth.
But it warned its full year earnings would be significantly skewed to the first half, due to expectations of a lower contribution from major projects and the partial sale of its Boral Gypsum business.
Boral also said it had received lower than expected profits from property sales during the 2013-14 financial year, which in previous years have boosted second half results.
Boral said it will announce its first half results on Wednesday, February 12, "at which time it will provide more detail regarding these matters".
"Boral and USG continue to progress towards completion of the plasterboard and ceilings joint venture. While completion was originally anticipated to occur by 31 January 2014, it is now expected to occur on or before 28 February 2014, in order to obtain necessary regulatory approvals," the company told the ASX yesterday.
Boral’s update means that it is heading for its best result in several years for the full year.
Not only did it lose $25 million in the first half of 2012-13, it only earned $104 million after tax on an underlying basis before a slew of write downs. That was up 4% from the 2011-12 performance.
Boral should at least top the $104 million figure this financial year. But analysts questioned the unclear nature of the second half guidance for a lower profit. They want to know just how low that could go.
BLD 1Y – Boral expects $90m in 1H profit, issues 2H profit warning
