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James Hardie 1Q profit falls 34 per cent

Marnie Banger  |  08 Aug 2017Text size  Decrease  Increase  |  

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SYDNEY - [AAP] Building materials supplier James Hardie's (ASX: JHX) first-quarter profit has fallen 34 per cent to $US57.4 million ($A72.6 million), partly due to higher production costs.

The company's net sales for the three months to June 30 grew 6 per cent, to $US507.7 million, compared to the same period last year, despite being hit by capacity constraints.

The company says its earnings margins had been pressured from manufacturing inefficiencies and higher production costs.

Chief executive Louis Gries said demand had grown but capacity constraints, which arose in the previous year, had dampened the results.

"Manufacturing inefficiencies and production costs led to a decrease in EBIT (earnings before interest and tax) margin of 5.2 percentage points compared to the prior corresponding period," he said in a statement on Tuesday.

Mr Gries said capacity had increased somewhat in the first quarter compared to the previous three months and the first quarter last year, and James Hardie would focus on improving it further.

"Our focus this year will be on increasing our manufacturing capacity to drive a higher, longer-term, return on capital and improving the performance of our North America manufacturing network."

He said the company's International Fibre Cement unit's sales were up 8 per cent thanks to growth in the Asia-Pacific market while a 10 per cent EBIT lift was driven by the strong performance of the Australian and New Zealand segment.

The company received 146 asbestos claims in the quarter, 5 per cent fewer than in the same period last year.

The average claim settlement was $A228,000, up from $A224,000 in the previous first quarter.


* Three-month net profit down 34pct to $US57.4 million

* Net sales up 6pct to $US507.7m

* Asbestos claims down 5pct to 146


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