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CSR profit shatters on glass, power prices

AAP  |  08 May 2019Text size  Decrease  Increase  |  
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Building product company CSR's (ASX: CSR) full-year profit has been hurt by higher power prices and losses linked to the sale of its troubled glass business, while property market uncertainty is clouding its near-term guidance.

The company's share price slipped as much as 4.1 per cent on Wednesday after it announced net profit for the year to March 31 had fallen by 59 per cent to $78 million.

The result was weighed down by higher electricity costs at its aluminium business and a $61 million loss associated with the sale of Viridian Glass in January.

CSR shares were 0.88 per cent lower at $3.355 at 12:50pm.

Chief executive and managing director Rob Sindel said the company's building products business performed well despite the residential construction market slowing, but he could not provide a definitive near-term outlook amid expectations of further uncertainty.

He said while the market had been hurt by a credit squeeze the long term outlook was more positive on expectations of continued population growth and the impending end of the federal election campaign.

"That's why we think about it over the next three to four years (instead of) over the next 12 months," Mr Sindel said on Wednesday.

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"These things are usually pretty short and sharp... while ever we maintain high employment levels and we get through the noise of the election, we expect these things to pick up."

CSR said revenue from continuing operations for the year rose four per cent to $2.32 billion, but revenue from its discontinued glass unit fell by $50 million, or 13 per cent, to $318.9 million.

CSR sold Viridian to Crescent Capital Partners in January for $155 million.

Earnings from continuing operations fell by 17 per cent to $265 million due to higher electricity costs in aluminium, which delivered $36.6 million in EBIT down from $79.5 million last year.

The company cut its final dividend by half a cent to 13 cents, partially franked.
Meanwhile, the search continues for a successor to Mr Sindel, who signalled his intention to step down this year.

CSR said a new appointment is expected to be announced prior to the June 26 annual general meeting.

CSR profit shatters on glass losses

  • Full-year net profit down 59 per cent to $78 million
  • Revenue from continued operations up four per cent to $2.32 billion
  • Revenue from discontinued operations down 13 per cent to $318.9 million
  • Final dividend down half a cent to 13 cents, partially franked.

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