Displaying items by tag: Boral

Australia: Building materials supplier Boral has reported a loss of US$25.1m for the first half of its 2012-2013 fiscal year, due to a sustained weakness in the Australian and US housing markets. It recorded a profit of US$157m in the same period in 2011-2012.

For the half-year ending on 31 December 2012, Boral reported a sales revenue of US$2.86bn, 14% above the previous year. Earnings before interest and tax (EBIT) (before significant items) increased by 3% to US$116m. Both figures benefitted from acquisitions that the company made. Profits were hit by US$79.6m impairment charges tied to the suspension of clinker production at Waurn Ponds, Victoria and first half restructuring and redundancy costs.

"In Australia, Construction Materials delivered a solid 25% improvement in EBIT, but Cement reported a 15% decline and Building Products reported a very disappointing US$18.6m first half loss, following an US$11.4m loss in the second half of last year," said Boral's CEO and Managing Director Bob Kane. He added that in the company's cement division, the high Australian dollar and increasing production costs have continued to impact. Boral has taken action to replace Boral's manufactured clinker in Victoria with lower cost imports.

Australia: Ross Harper has been appointed the Executive General Manager of the Cement division of Boral following a restructuring initiative. The new role includes his previous responsibilities as Operations Manager because Boral's cement business is set to decrease in size following the divestments of Boral's Asian Construction Materials businesses along with the planned closure of clinker manufacturing at the Waurn Ponds cement plant. Harper replaces Divisional Managing Director Mike Beardsell who will leave the organisation by the end of January 2013.

Previously National Operations Manager, Boral Cement, Harper joined Boral in January 2006. He has over 30 years experience with industrial process industries including the energy, pulp and paper and building material sectors. He held the role of General Manager, Golden Bay Cement with Fletcher Building before joining Boral as General Manager NSW, Blue Circle Southern Cement. Ross holds a Doctorate in Chemistry from Victoria University of Wellington, New Zealand.

Australia: Boral, Australia's largest building materials supplier, has said that it will cut 1000 jobs from its global operations this fiscal year as part of a restructuring initiative intended to improve competitiveness. The changes are hoped to save US$95m annually with estimated savings of US$39m in 2013.

CEO and managing director Mike Kane described the company as 'burdened' with excessive overhead costs. "While this may be less obvious during the good times, it becomes critically exposed when times are tough," he said. The restructuring follows a 100 day review of the business which Kane conducted.

The majority of job losses are in Australia, where 885 positions will be axed. This includes the 90 roles Boral said that it would cut in December 2012 as it announced plans to suspend the production of clinker at its Waurn Ponds plant in eastern Australia. 15 jobs will be cut in the US.

In June 2012 the company reported having 14,740 employees, with around 8730 in Australia. A further reduction of 1420 employees will also take place due to Boral's previously announced divestment of assets in Asia and Australia.

Executive changes in Boral's cement division as part of the restructuring include the departure of Mike Beardsell, Divisional Managing Director, by the end of January 2013. He will be replaced by Ross Harper, who is currently in the role of Operations Manager, will increase his responsibilities to become Executive General Manager of the Cement division.

As 2012 draws to a close the challenges posed by the Australian carbon tax to the Australian cement industry are starting to show. First, Holcim Australia announced it was to lay off 150 staff. Then Boral released the news that it was planning to cut 90 jobs at its Waurn Ponds cement plant.

Following years of debate the Gillard government introduced the Clean Energy Act in July 2012. Heavy polluters were initially charged US$23/t of CO₂ emitted, more than twice the cost of similar schemes in Europe where it is US$10/t. A key criticism of the scheme was that it would damage the Australian domestic cement industry with cheap imports. However the Australian government cushioned the move with compensation packages for major polluters, including cement producers, currently set to last five years.

Although the Australian cement industry hasn't totally collapsed, with the loss of 1800 jobs as the Australian Federal Opposition warned of in 2011, imports have been favoured in recent months. Boral's suspension of clinker production at Waurn Ponds will increase imports. The change will result in 25-30% of Boral's clinker being imported. It's worth noting that Boral pointed out in its press release that this was 'in-line' with the Australian industry.

Adelaide Brighton, the country's third biggest producer after Holcim and Boral, may not have laid anybody off but it has secured a 10-year supply of foreign clinker. On 5 December 2012 the building materials producer announced that it was going to a buy a 30% stake in Malaysian white clinker and white cement producer, Aalborg Portland Malaysia. In the accompanying press statement the company's chief financial officer explicitly blamed the carbon tax as one of the reasons for the acquisition.

Whether the job losses at Boral and Holcim can be totally blamed on the carbon tax remains to be seen. Boral's second-half profit for the year ending 30 June 2012 suffered a fall of 59% to US$35.7m. Holcim noted weaker demand outside of mining regions for the third quarter of 2012. By contrast, Adelaide Brighton reported steady gains in its half-year report for 2012 although cement sales only increased 'marginally'. Elsewhere in its report Adelaide Brighton stated that it would cope with the impact of the carbon tax by reducing reliance on domestic manufacturing. These can hardly be comforting words for the Australian cement industry.

Australia: Building products maker Boral is cutting 90 jobs as it reduces some manufacturing at a cement plant in Geelong, Victoria, in favour of imports. About 90 staff at the Waurn Ponds cement plant will be affected by the suspension of clinker production. Boral intends to import clinker due to the high Australian dollar and low shipping costs and use the plant as a cement milling facility only. It is thought that the kiln will be shut down by April 2013.

The Australian Workers' Union (AWU) said that it will work with the company to try and save as many jobs as possible. Talks will be held with the workers over coming weeks to explore all options, to avoid or mitigate job losses and to organise redundancies or redeployment within the company.

"A continued low level of demand associated with the downturn in Australian building and construction activity is also adversely impacting the profitability of Boral's cement business, where high fixed cost manufacturing assets continue to be under-utilised," said Boral's CEO Mike Kane said in a statement. "Across all of our businesses we need to ensure that we are aligning our domestic production with demand levels and that our cost structures are globally competitive and can be sustained through the cycle."

Australia: Australian buildings materials company Boral has appointed the head of its US division, Mike Kane, as its new chief executive officer following the departure of Mark Selway in May 2012. Kane will assume the post on 1 October 2012.

Kane joined the company in February 2010 and has executive experience at four other materials companies including US Gypsum, Hanson Building Materials, Johns-Manville and Holcim

"He has spent the past two and a half years significantly realigning the US business to the changed market conditions and positioning Boral to take full advantage of the US market recovery," said chairman Bob Every.

Kane said Boral has an increasingly significant position in the global building materials industry and said its Asian plasterboard unit provides a growth opportunity in that region.

Australia: Boral has reported a 59% fall in second-half profit, hit by weak housing construction in Australia and delays in big resource and road projects. Boral, which removed its chief executive in May 2012, declined to give a fiscal forecast for the year ahead, in light of uncertain market conditions, but said it would update investors at its annual meeting in November 2012.

Net profit for the six months to June 2012 fell to US$35.7m from US$87m a year earlier, as calculated from full year figures. The building products maker issued profit warnings in April 2012 and June 2012.

"Earnings from our Australian business in the six months to June were hit by very weak housing and non-residential building activity, combined with delays and disruption from sustained rainfall across the east coast. The positive impact of price increases was more than offset by much weaker sales volumes in these markets and by higher costs, including from the wet weather," said Boral's chief executive officer, Ross Batstone.

Overall for the year to 30 June 2012 profit, after tax dropped by 42% to US$106m from US$183m. Sales revenue grew by 5%, to US$5.24bn from US$4.94bn, but this excludes the impact of the acquisition of Lafarge's 50% of Boral's stake in their Asian plasterboard joint-venture.

Boral's cement sector reported a slight fall in revenue to US$449m from US$462m, due to a 40% reduction in New South Wales lime volumes, marginally lower cement volumes and broadly flat cement prices. Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 12%, to US$124m from US$140m.

For its 2013 outlook Boral expects its cement volumes to be remain flat, with residential demand improvements in the state of North South Wales offset by weakness in Victoria and continued low volumes in South East Queensland. The pricing environment will remain challenging due to the high Australian dollar and low sea freight prices, which allow imports from Asian countries.

Australia: Boral, Australia's leading building materials supplier, has downgraded its overall profit forecast for the second time in two months, saying earnings could be as much as US$75.5m lower than it expected in February 2012. The downgrade comes with predictions that the group will announce asset writedowns when it delivers its full-year result in August 2012.

It is now expected that Boral will post a net profit before significant items for the current financial year in the range of US$100-110m. The company has continued to blame the profit downgrades on bad weather and weak conditions in the property and construction market and said that an early maintenance shutdown at Waurn Ponds Cement Works in Victoria was also weighing on earnings.

Australia: The board of Australian building products firm Boral Ltd has removed the company's chief executive Mark Selway saying that a new leader was needed who could 'harmonise' the company after a two-year restructuring process.

Selway, who has headed Boral since January 2010, oversaw a turnaround involving the sale of about US$986m in assets and cutting capacity in manufacturing plants as the company battled weak housing and construction markets both in Australia and the United States. In April 2012 Boral posted net profit below its own forecast and made an unexpected cut in full-year profit guidance because of heavy rain and wet weather across eastern Australia.

"The board has decided that the stewardship of the company going forward requires a chief executive with a leadership style suited to harmonising the changes that have occurred over the last two years throughout the company," Boral said in a statement. The board said Selway would step down from his role effective immediately, although he would remain employed until 31 July 2012 to help with the transition.

Australian-born Selway, aged 52, started his career in the automotive sector before becoming the international marketing director of Britax International plc at the age of 28. After working for the company in different postings around the world he later joined the board. In 2001, Selway was appointed chief executive of Weir Group plc, a Scottish based engineering equipment company for the oil, gas, mining and power and industrial sectors.