Australia: James Hardie Industries has 'washed its hands' of any responsibility for a shortfall in compensation payments to asbestos victims as it reported robust profit growth and rewarded shareholders with an ordinary second half dividend of US$120m and a US$98m special dividend.

In February 2015, Andrew Constance, who was then New South Wales treasurer, agreed to increase the state's loan facility to the Asbestos Injuries Compensation Fund (AICF) by more than US$100m after a blowout in expensive mesothelioma claims threatened to leave the fund short of cash for future claims. Constance amended the loan terms after the fund said in 2014 that contributions from James Hardie were likely to be insufficient and it would apply to the NSW courts to pay some claimants in instalments unless it received a top-up. Under the terms of an agreement struck in 2007, James Hardie pays 35% of its operating cashflow to the fund.

Group chief financial officer Matt Marsh said that dividend policy was unrelated to asbestos liabilities. "The way we declare our dividends isn't related to the AICF," said Marsh. "We always prioritise making that payment to the AICF and then we start to allocate our capital that is left over." During 2014 - 2015, James Hardie paid US$113m to the AICF. It expects to make another payment of US$62.8m on 1 July 2015. James Hardie has paid US$718m to the fund since it was set up in 2007.

Chief executive Louis Gries said that James Hardie's manufacturing plants, 'Were getting a pretty good kick' in the quarter that ended on 31 March 2015 following some start-up troubles earlier in the year, while falling pulp and freight prices had reduced costs. During the quarter, earnings before interest and tax margins hit the top end of the group's 20 – 25% range. He said that after focus on operational improvements over the past two years, the company would now chase sales. "We are definitely shifting more of our management attention to how we grow the top line rather than how we get efficiencies," said Gries.

James Hardie is aiming for fibre cement to account for 35% of the external cladding used in the US housing market, with James Hardie controlling 90% of that market. During the 2014 - 2015 year, the company spent US$173m on expansion projects to meet growing demand. Gries said that James Hardie's plants and capacity would keep expanding along with the housing recovery. James Hardie expects US housing starts of 1.1 - 1.2m in 2015 - 2016 and 'improved results' in the Asia Pacific region.