Fletcher Building today announced its unaudited interim results for the six months ended 31 December 2009. The group recorded net earnings after tax of $154 million, compared with $172 million in the previous corresponding period.
Operating earnings (earnings before interest and tax) before unusual items were $271 million compared with $322 million in the previous corresponding period. Cashflow from operations was up 52 percent to $317 million compared with $208 million in the first six months of the 2009 financial year.
The interim dividend of 14.0 cents per share is in line with the guidance provided at the annual shareholders’ meeting in November 2009. The dividend will be partially imputed for New Zealand tax purposes.
Total sales for the group were down 10 percent to $3,393 million as a result of subdued trading conditions in most markets. In particular, the Steel division experienced a 25 percent decline in sales due to lower volumes and prices. Sales in the Laminates & Panels division were 10 percent lower due to reduced demand and the currency translation effects of the stronger New Zealand dollar. Concrete sales in New Zealand and Australia were down 13 percent as a result of weak demand, particularly in New Zealand.
Partly offsetting this sales decline were stronger insulation sales in Australia and New Zealand, which were up 39 percent due to government stimulus measures. Strong activity levels in the New Zealand construction business resulted in sales growth of 6 percent.
Chief Executive Officer, Jonathan Ling said “as we expected, the tough economic conditions in most of the markets in which the group operates negatively impacted our results, although government stimulus measures have helped to offset the worst effects of the recession”.
“In that context, we were particularly pleased with the strong group cashflow performance, with cashflow from operations up 52 percent on the prior corresponding period. Combined with the restructuring initiatives undertaken over the past year, the group is in a very strong financial position and well placed for the future”.
“What has also given us cause for optimism is that the operating earnings in the first half of the 2010 financial year were 15 percent higher than for the second half of the prior year. We have had a noticeable pick-up in trading activity in the October to December period of 2009, with growth in sales and earnings in those businesses with exposure to the New Zealand and Australian residential housing markets.”
“This suggests that we are finally starting to see a recovery in residential construction activity in New Zealand and Australia, albeit from a very low base”, Mr Ling said.
- Comparisons are with the prior corresponding period
- Total sales of $3,393 million, down from $3,757 million
- Operating earnings of $271 million, down from $322 million
- Net earnings of $154 million, down from $172 million
- Cashflow from operations up 52 percent to $317 million
- An interim dividend of 14.0 cents per share with partial New Zealand tax credits
- Interest cover at 5.2 times
- Earnings per share were 26 cents
- Capital expenditure down 53 percent to $77 million
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