Building products group CSR has put on a brave face after posting a $147 million loss, saying it believes Australia’s housing market is recovering.
Chief executive Rob Sindel pointed to two sets of strong official data for March released this week as evidence of a rebound: the biggest jump in home loan approvals in four years and lift in the number of new houses built.
He also cited record low interest rates, improved affordability and auction clearance rates and a population increase of 383,000 last year.
However, residential building approvals in March fell to their lowest level in seven months.
“We are slightly more confident than our competitors,” Mr Sindel said in an analysts briefing.
He is forecasting 147,000 housing starts nationally this year, up from 145,000 and said CSR was focussing on high density, multi-residential building as that was the direction the market was moving into.
However the group recorded a full-year statutory net loss of $146.9 million, which included $255.6 million in write-downs and the restructuring of its loss-making Viridian glass business.
CSR shares fell 1.5 cents to $1.95.
The glass business posted a $39 million loss and earnings at its aluminium smelter slumped by 38 per cent to $50 million with commodity prices weak.
In contrast, its various building products including bricks and tiles, but excluding glass, are realising better prices despite a weak market.
That division’s earnings were down 11 per cent to $77 million, due to the sale of a Malaysian concrete business.
Morningstar equities analyst Nathan Zaia said the lift in building products prices was a good sign for the sector as it indicated rational pricing had returned, following a period of hostility with customers.
However, he said he would not want to own the glass or aluminium businesses.
Mr Sindel said he aimed to get Viridian breaking even again by 2016 but would need housing starts to rise further to 155,000.
CSR cut 150 jobs at Viridian in March, with one plant in Sydney to be shut in July and two other processing units to merge by January 2014.
An unfranked dividend of 2.1 cents per share was declared.
