The Boral Ltd (ASX: BLD) share price fell 2% today after the company released its half-year results to the market for the period ending 31 December 2018, reporting an underlying net profit after tax (NPAT) of $200 million.
Boral is an international building and construction materials company.
Key Results
Boral’s results were complex and convoluted with the exclusion of divested operations and divestment costs, and comparative figures restated to exclude divested operations among other things, reporting:
- Underlying revenue up 2% to $2.99 billion
- Underlying EBITDA down 3% to $485 million
- Underlying NPAT down 6% to $200 million
- An interim dividend of 13 cents per share
Operational Results
Underlying Australian operation revenues were up slightly by 1% for the period but suffered lower margins with underlying EBITDA falling 8% due to what the company attributed as “lower Concrete volumes and inefficiencies from project delays and wet October in NSW”.
Its underlying US operations revenues were up 11% due to mainly strong growth in Roofing despite being impacted by extreme rain in the USA. It experienced margin expansion to go with increased volumes and its underlying EBITDA increased 18% due to what the company attributed “price increases and synergies”.
Boral’s 50% joint venture in USG Boral reported a 35% decline in equity income to $25 million. While revenues for USG Boral were up, it attributed the decline in margins due to a market-driven decline in South Korea.
Future Outlook
Like its reporting, the future projections provided by the company were quite convoluted. Boral expects its US operations to be its strongest performing, guiding for a 15% increase in EBITDA from continuing operations in US dollars. It expects Australian operations to have a similar EBITDA, but Property earnings will be down $30 million. It also guided for lower profits from its joint venture USG Boral.
Rask Perspective
The complex and convoluted reporting from Boral makes me put this into the ‘too hard basket’. Therefore, at today’s prices, it’s a stock I have no desire to add to my portfolio.
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