Global building products group James Hardie Industries has raised its 2022 earnings forecast for the second time this financial year, as it looks to continuing strong demand for its building products from the booming US housing market.
James Hardie revealed the upgrade in its second quarter and interim results for the 2021-22 financial year on Tuesday.
The improving outlook in its biggest single market – the US has seen earnings now forecast to be between $US580 million and $US600 million, up from its previous forecast of $550 million to $590 million.
Hardie also warned that like so many other businesses, it is raising prices (and seeing prices rise) because of the persistent shortage of raw materials and labour.
James Hardie’s North American business, the biggest revenue contributor, brought in $US1.21 billion in net sales for the September 30 first-half, up 25% from last year.
James Hardie said adjusted net operating profit for six months ended September 30 came in at $US289.1 million, up from the $US209.8 million a year ago, and slightly higher than consensus estimates.
For the three months to September global net sales rose 23% year on year to $US903.2 million, a record result and adjusted net income was up 29% from the year prior at $US154.9 million.
James Hardie also declared an interim dividend of 40 US cents a share. It didn’t pay one a year ago because of cash retention needs brought about by Covid. The company resumed paying dividends earlier this year.
CEO Dr Jack Truong said in the report to the ASX:
“We continue to make excellent progress on our stated global strategy. Our strong execution on this strategy is reflected in second quarter global price/mix growth of +9%, including North America price/mix growth of +9%, Europe price/mix growth of 8% and Asia Pacific price/mix growth of +4%.
“Our growth momentum in accelerating high value products penetration, which underpins price/mix, is the result of 1) enabling our customers to make more money by selling more James Hardie products and 2) marketing directly to the homeowners to create demand of our high value products through our customers.
Hardie shares eased 0.7% to $53.94.
