Boral’s U.S. division—which manufactures cladding, roofing and construction materials—saw earnings before interest and taxes (EBIT) fall 9% in the first half of its fiscal year 2012 to a loss of A$51 million (US$55 million) from the year-ago period, the company reported yesterday. The loss comes despite a 15% increase in revenues to A$244 million (US$264 million) over the same period last year. First-half revenues were up 11% from the second-half of 2011, while the division made a slight gain on its EBIT losses of the previous period.
Construction materials business saw revenue decline marginally during the period with growth in fly ash offset by a slow building market, the company said, although it noted modest sales improvement among the division’s other product areas. Improved brick and fly ash results were also redacted in part by A$4 million (US$4.3 million) in once-off costs for the launch and market testing of the group’s new composite trim and lone tile operations, as well as the first time impact of its Cultured Stone product.
The cladding segment—including national brick-making operations, the new composite trim, Cultured Stone, and the group’s sales and distribution network—saw brick revenue and margins improve on a local currency basis as a result of intentional capacity reductions and production improvements in the remaining operations. The company recognized an A$16 million (US$17.3 million) significant charge resulting from its permanently closing two additional brick plants in its first-half accounts. The company said it has closed nearly half of its U.S. brick plants since 2007, reducing brick capacity by one-third to 1.3 billion bricks, down more than 30% from the market peak.
The company’s acquisition of a 50% share and management control of the Cultured Stone business beginning December 2010 contibuted A$8 million (US$8.6) in losses and A$41 million (US$44) in revenue for the first half of its 2012 fiscal year.