Building products producer James Hardie has posted an improved net profit of $US68.5 million ($A65.02 million) in its first quarter as the US housing market makes a gradual recovery.
However, the company says the Australian housing market deteriorated during the same three months to June 30, 2012.
Sales revenue was up eight per cent to $US339.7 million ($A323.23 million) and operating profit was up 11 per cent to $US43.8 million ($A41.68 million) over the previous corresponding period.
James Hardie forecasts full year earnings excluding asbestos, Australian Securities and Investments Commission (ASIC) expenses and tax adjustments to be in the range of $US140 million to $US160 million ($A133.21 million – A152.24 million) compared to $US140.4 million for the year ending March 31.
Chief executive officer Louis Gries said the company was focused on returning to the growth experienced before the economic downturn.
“We’re very committed to getting back to growth,” he said.
“It’s our first objective and that’s what you’re going to see us do in this quarter and right through the year as we put resources in.”
James Hardie said the recovery in the US housing market was in its early stages and the extent and rate of improvement continued to be inhibited by tight credit conditions, excess inventory, low consumer confidence and high unemployment.
However, Mr Gries said he believed the company could grow market share.
“We started to put research into the US businesses and it shows that the US shows recovery will continue at least a moderate pace,” he said.
“Our resources are all directed at starting to grow our share for fibre cement in the market.”
The Australian market was less certain with low consumer confidence leading to cyclical lows.
“We will be careful in Australia until we understand where the market is going to go and when and what the recovery might look like down there,” Mr Gries said.
Chief financial officer Russell Chenu said he had not seen any impact from the carbon tax on James Hardie’s results so far.
“I think that’s a long term issue,” he said.
The company said the New Zealand market continued to be subdued while the operating environment in the Philippines was positive.
Meanwhile, in a speech to the James Hardie’s annual general meeting on Monday, chairman Michael Hammes said the company had contributed $A177.5 million to its Asbestos Injuries Compensation Fund in the calendar year 2012.
This included an early contribution of $A132.3 million, which was 35 per cent of an $A369.8 million refund the Australian tax office made to James Hardie after the High Court made a ruling in the company’s favour in February.
James Hardie shares closed 50 cents, or 6.05 per cent, lower to $7.77.
