Displaying items by tag: Fletcher Building

New Zealand: Cement producer and construction firm Fletcher Building has reported a 20% year-on-year drop in domestic housing demand during the first quarter of 2023. The Australian newspaper has reported that the company attributed the decline to ‘soaring’ interest rates in the country. It now expects to sell 800 residential units in 2023, 20% below its previous expectation of 1000 units. Fletcher Building said that building materials costs rose by 5 – 10% between 2020 and 2022, due to ‘higher input and commodity costs’ in production.

CEO Ross Taylor said that Fletcher Building faces labour shortages in its civil construction business, but maintained a strong order pipeline. Taylor said “It won’t drive an uptick in volumes but it will underpin the volumes in the next three to four years.”

New Zealand: Fletcher Building Materials recorded consolidated sales of US$5.37bn during its 2022 financial year, up by 4.7% year-on-year from US$5.13bn in the previous year. Its net earnings also rose by 42%, to US$273m from US$193m.

The group's concrete division, which includes Golden Bay Cement, contributed US$556m-worth (9%) of group sales. The figure represents an 8% increase from 2021 financial year levels. The business recorded 'strong performances' across all key product segments, underpinned by 'robust' demand and pricing. It made capital expenditure investments of US$51.1m, including in a waste tyre recycling system upgrade at the Golden Bay cement plant. The latter increased the plant's alternative fuel (AF) substitution to 50% from 35%. The company also continued to focus on developing low-CO₂ concrete binders.

Fletcher Building Materials chief executive officer Ross Taylor said "The 2022 financial year has not been without its challenges. Global and national supply chain disruptions have continued into the third year of the Covid-19 pandemic." He added "The New Zealand Commerce Commission recently published its interim market study report into residential building supplies. The final report and recommendations will be published in December 2022 and in the meantime we will continue to work collaboratively with both the commission and the government."

New Zealand: Golden Bay is spending US$6m on an upgrade to its Wellington cement terminal. The project will increased storage capacity, reconfigure the site for better traffic management, add new office facilities and upgrade ship discharge lines to reduce load times. Greater automation is also intended, as well as new branding for the site.

Nick Traber, Fletcher Building’s chief executive for concrete said, “Our Golden Bay Terminal has served Wellington well for many decades and has contributed to some of the region’s biggest infrastructure projects along with countless houses, driveways and other developments. The upgrade is a key part of our strategy to remove bottlenecks in our operations to drive growth and reduce costs, as well as increase the resilience of our supply chain using all modes of transport. It’s a demonstration of our commitment to local manufacturing as New Zealand's only and lowest carbon cement producer.”

New Zealand: Fletcher Building is expecting to declare lower earnings in the half year to 31 December 2018 due to a regional slowdown, particularly in Australia. Its earnings before interest and tax (EBIT) for the six month period was around 10% lower than the same period of the 2017-2018 financial year. It is expected to be in the range of US$432-467m.

In a report Fletcher Building said, “While the company continues to target a result at the top end of this range, it is prudent at this stage in the year to highlight that the 2019 financial year EBIT will be impacted by the outage at the Golden Bay Cement plant, the slowdown in the Australian residential market and the reduction in land development earnings compared to last year.”

New Zealand: Fletcher Building says that its Golden Bay Cement plant in Auckland was forced stop its cement mill for four weeks in September 2018. It said it had insurance to cover this but that its earnings for its 2019 financial year are likely to be impacted by up to US$8m. Generally, the building materials producer reported that, until the end of October 2018, its business in New Zealand had been flat. In Australia it is facing ‘challenging’ conditions with growing input prices and a slowing residential sector.

New Zealand: Fletcher Building has appointed Ian Jones as the chief executive of its newly created Concrete Division. The new division includes Golden Bay Cement, Winstone Aggregates and Firth. The appointment is a move by the Antipodean building materials company to focus its business on core operations in building products and distribution. The group also plans to sell its Formica and Roof Tile Group businesses.

New Zealand: Golden Bay Cement plans to start shipping cement directly from its integrated plant at Whangarei, Northland in the North Island. Previously, cement from the plant was being shipped to the South Island via Auckland, according to the New Zealand Herald newspaper. Once the logistic change is completed around 11% of Whangarei’s output will be shipped to the South Island.

Australasia: LafargeHolcim has said that, despite what has been reported recently in the media, its Australian and New Zealand operations are not for sale.

LafargeHolcim recently announced a plan to divest almost US$5bn of assets in 2016 after posting unexpectedly weak third-quarter results. Speculation had emerged that it might exit from the Australasia region.

However, according to local media, an internal email sent to staff on 30 November 2015, Holcim Australia Chief Executive Mark Campbell said the company was 'not currently being sold,' but could not rule out an exit in the long term.

"I have checked whether the LafargeHolcim group had made a decision to sell the businesses in Australia and New Zealand and started a sale process without my knowledge and the answer I have received is 'no,'" said Campbell. "That said, organisations change focus over time and it is impossible to say that we will always be part of the LafargeHolcim group."

Australian-listed rivals, including Boral, Fletcher Building and Adelaide Brighton, are seen as potential acquirers, should the multinational giant choose to sell off its local arm. Ireland's CRH may also be interested. However, Morgan Stanley said that many of LafargeHolcim's local competitors might run into competition issues, given that the market is concentrated among several large players. "Should Adelaide Brighton fully participate, we cannot rule out that the 50% share in Cement Australia would be divested due to Australian regulations, given Adelaide Brighton's already strong share in cement," said Morgan Stanley Analyst James Rutledge. "While we think Fletcher Building is unlikely to be in a position to participate in industry consolidation, a change in owner that was less integrated into the region may be a positive for Fletcher Building at the margin," said Rutledge. "Given Boral's strong share in aggregates and the concrete market, we believe it will be difficult to participate in industry consolidation."

While Lafarge has a limited local presence in Australia and New Zealand, Holcim bought a string of Australian assets from Mexico's Cemex in 2009 for US$2bn and now boasts more than 350 sites nationwide.

New Zealand: Fletcher Building has reported a gain in its 2015 fiscal year earnings before one-time charges, as strong growth in its biggest market of New Zealand offset a weaker performance in Australia and the rest of the world.

Operating earnings, excluding one-time items, rose by 5% to US$653m in the year that ended on 30 June 2015. Net profit fell by 20% to US$270m after US$150m of one-time charges for plant closures and impairments. Fletcher's US$150m of one-time charges included a US$78m impairment of goodwill relating to its Forman, Stramit, Tasman Insulation and Humes businesses. There were site closure costs of US$65m related to the Crane Copper Tube business and Iplex Australia. Operating earnings before one-time items in New Zealand rose by 24%, accounting for 69% of the group total, while in Australia earnings fell by 30% and by 7% for the rest of the world.

The heavy building products, which includes New Zealand cement, concrete pipes and quarry products, Australian concrete and quarry products, plastic pipes and steel and is Fletcher's biggest division, recorded a 6% decline in gross revenue to US$2.1bn. Operating earnings dropped by 17% to US$177m, as weaker trading in Australia offset gains in New Zealand. A US$8m loss from plastic pipes reflected a drop in demand from the coal seam gas sector and increased competition in Australia. Light building products, which takes in New Zealand and Australian building materials and roofing tiles, had little changed gross revenue at US$1.3bn, while operating earnings before one-time items rose by 2% to US$118m. New Zealand distribution revenue rose by 6% to US$1.76bn and earnings gained 29% to US$108m, with most of the growth coming from building supplies. In Australia, distribution revenue fell by 11% to US$826m and operating earnings before one-time items rose 6% to US$18m. Construction revenue jumped by 21% to US$1.58bn and earnings before items rose by 32% to US$140m.

In other news, Fletcher has conditionally agreed to sell the operations of Rocla Quarry Products to Hanson Construction Materials in a deal valued at about US$149m. The company expects a pre-tax gain of about US$73.5m from the sale, which requires Australian regulatory approval.