Australia: Boral has reported a first-half 2015 profit of US$81.1m, benefiting from a recent overhaul of its business, a pickup in Australian demand for home-building products and a deeper push into Asian markets. Boral had reported a net loss of US$20.2m in the same period of 2014, as earnings were weighed down by asset write-downs.
Boral returned to profit in the second half of the 2014 fiscal year that ended on 31 June 2014, as it reaped the benefits from the earlier restructuring that reduced the size of its workforce and resulted in the closure of some unprofitable operations. "The restructuring and streamlining of Boral's businesses that has been taking place is enabling it to be more responsive to market changes," said chief executive Mike Kane.
Boral said that activity in the Australian housing market, which accounts for about 28% of total revenue, continued to gain pace during the period. A nascent housing recovery is underway in Australia, fuelled by record-low interest rates and demand from investors in major cities like Sydney. It is helping Boral to recover from several tough years, despite uncertainty about the outlook for the economy as a decade-long mining-investment boom slows. While the number of Australian home-building permits slipped by 3.3% month-on-month in December 2014, according to the latest government data, it followed a 7.7% rise in November 2014 from October 2014 and an 11.9% rise in October 2014 from September 2014.
Boral said that appetite for its products in other markets was also rising. It highlighted stronger gypsum demand in Korea and Thailand in particular, although it said that demand in China, where the property market is cooling, was subdued. In the US, Boral said that it was now seeing the benefits from a housing-market rebound and its own moves to restructure the business. The company said that it expects earnings to be 'broadly break-even' in the full 2015 fiscal year after considerable losses in recent years.
