Join our daily newsletter At The Bell to receive exclusive market insights
- Building company Boral suffered a 38 per cent loss to profits during the 2019 financial year
- Today the company announced it will reclaim full interest in USG Boral Australia and New Zealand, and enter a 50:50 joint venture with plasterboard company, Gebr Knauf
- Boral’s share price is down 19.96 per cent today, currently sitting at $3.97 apiece
Boral’s share price is suffering a near 20 per cent hit today, following news its profits fell 38 per cent during the 2019 financial year.
The company attributes the large portion of the profit dip being due to a $174 million impairment from the Meridian Brick joint venture.
Boral’s CEO and Managing Director Mike Kane, leapt to the building company’s defence, proposing there were several factors out of Boral’s control which impacted the yearly performance.
“Our business is not immune to market cycles, or adverse weather, and in response to softer market conditions and extreme rainfall events in the U.S., we have delivered tangible benefits,” Mike said.
Improvement initiatives and cost reduction programs are flagged as key elements in delivering financial benefits. According to the company, this will continue throughout the 2020 financial year.
Sales revenue saw a four per cent increase on the previous year, despite a reported 15 per cent decrease in the Australian housing market, and two per cent decrease in the U.S. housing market.
Boral also announced today it will buy back full ownership of USG Boral Australia and New Zealand. Boral’s total investment is US$441 million which also includes payments to enter a joint venture with plasterboard company, Gebr Knauf.
The 50:50 joint venture with Knauf gives USG Boral a stake in Knauf Asia Plasterboard, which operates in China and South East Asia. The Middle East business will be sold to Knauf for US$50 million.
Shareholders will receive a final, half franked dividend of $0.135 per share, bringing the total for the year to $0.265 per share.
Boral’s share price is down 19.96 per cent today, currently sitting at $3.97 apiece, as of AEST 1:14 pm.
