Boral swings to $1.14b bottom-line loss, won't pay dividend
Building materials giant Boral has swung to a $1.14 billion statutory net loss driven by a $1.32 billion non-cash impairment, but the company was also hit by substantially lower earnings margins in the second half due to lower sales and production.
The $4.7 billion ASX-listed company reported an underlying net profit after tax before significant items of $181 million, down a hefty 57 per cent on the prior year.
New Boral CEO Zlatko Todorcevski took the reins on July 1.Credit:Peter Braig
All of its divisions reported lower EBITDA (earnings before interest, tax, depreciation and amortisation), with the overall EBITDA result down 30 per cent to $710 million.
The large statutory net loss was expected, after the company flagged substantial details of its results early this week, when it revealed the $1.3 billion-plus impairment. But Boral did not reveal until today the bottom-line result.
The company, which recently appointed Zlatko Todorcevski as its new chief executive to succeed long-serving leader Mike Kane, will not pay a final dividend. It said it would not pay a final dividend because of the significant uncertainty in the economic outlook, and the fact that its 9.5 cent interim dividend represented 63 per cent of full-year earnings.
The dividend decision is in line with the company's dividend policy of paying 50-70 per cent of earnings before significant items, subject to financial circumstances. Total sales revenue was down 2 per cent to $5.73 billion.
"Boral's fiscal year 2020 results reflect a particularly challenging year. Following the lower than expected first half result from Boral North America, Boral had a difficult start to the second half of fiscal 2020," Mr Todorcevski said.
"Boral Australia was impacted by bushfire and flood-related events in Australia, resulting in significantly lower volumes and higher costs. This was quickly followed by COVID-19 disruptions, resulting in higher costs and production curtailments, which substantially reduced earnings for all divisions," he said.
Boral shares closed up 2.1 per cent on Thursday, ahead of the release of its results.
More to come