SYDNEY - [AAP] Building materials supplier James Hardie (ASX: JHX) has booked a nine per cent drop in third-quarter profit after the company paid down debt and recorded an increase in income tax expense.

James Hardie on Friday said net operating profit for the three months to December 31 was $US79.9 million ($A111.9 million), down from $US87.9 million a year ago.

Net sales for the three months to December 31 grew nine per cent to $US495.1 million driven by a higher average net sale price in its North America fiber cement segment and higher sales volumes in the international fiber cement division.

Chief executive Louis Gries said the company's North America Fiber Cement division grew seven per cent in the quarter, primarily due to higher net prices and modest volume growth.

"The capacity constraints which arose in the prior fiscal year dampened our demand in fiscal year 2018, despite our capacity increasing compared to the prior corresponding periods," Mr Gries said.

"We are on track to increase manufacturing capacity, improve the performance of our North America manufacturing network and drive improved primary demand growth."

Mr Gries said the international fiber cement division grew 15 per cent in the quarter on the back of strong volume growth in its Asia Pacific business.

The company's earnings before interest and tax also rose by 32 per cent to $US143.9 million, compared to $US108.7 million a year ago.

James Hardie expects steady growth in the US housing market over the full year and said the single family new home construction market and repair and remodel market will grow similarly to the year-on-year growth experienced in the past financial year.

It forecast new construction starts between about 1.2 and 1.3 million.

Full-year adjusted net operating profit is expected to be between $US260 million and $US275 million, compared to $US248.6 million in 2017.

James Hardie said the forecast is under the assumption that housing conditions in the US will continue to improve, input prices remain consistent and an average US$/A$ exchange rate is at, or near, current levels for the remainder of the year.

 

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