Construction company Boral Limited has released its full year results for the 2018 financial year, reporting a 47 per cent increase in net profit after tax before amortisation and significant items.
Its net profit after tax and after significant items was $441 million, 49 per cent up on the last year. The company’s earnings before interest, tax, depreciation and amortisation (EBTIDA) before significant items increased 47 per cent to $1.06 billion when compared with last year.
Sales revenue for the company had also increased by 34 per cent to $5.9 billion and reflect the acquisition of construction materials company Headwaters Incorporated.
Strong Australian construction markets and value creating property transactions saw Boral Australia’s EBITDA grow 15 percent.
The company reports the results are due to the significant growth from Boral North America, the acquisition of Headwaters and higher earnings from Boral Australia.
Boral’s CEO and Managing Director Mike Kane said that the significant earnings growth in the 2018 financial year follows Boral’s strong leverage to Australia’s booming infrastructure construction market and strong residential markets.
“In recent years we have worked to initially fix and then transform Boral’s portfolio to leverage strong markets in Australia, and capitalise on opportunities to grow in North America and in USG Boral’s markets in Asia, Australasia and the Middle East,” Mr Kane said.
“While our business is not immune to unfavourable weather impacts and operational disruptions, the full year results confirm that our transformation strategy is progressing well, and that Boral can deliver significant earnings with highly attractive margins.
“Boral Australia delivered a 15% lift in EBITDA to $634 million and attractive EBIT returns on funds employed of 17.5%, well above Boral’s cost of capital,” he said.
Mr Kane says the company has optimised its networks and will continue to grow volumes in Australia’s east coast markets, where demand is strong.
He expects further growth across all business in the 2019 financial year, including a significant lift in earning from Boral North America.
“In FY2019, in Boral Australia we expect to deliver high single-digit EBITDA growth or more, if we exclude property in both years. If we include our estimated $20 million of earnings from property in FY2019, we expect EBITDA to be at least in line with last year, which is a strong operational outlook given property sales contributed $63 million in FY2018,” Mr Kane said.
“Volumes from commercial, infrastructure and major projects activity, and margin improvements are expected to more than offset the impacts of a moderating residential construction sector.
“Our largest businesses – Australia and South Korea – are expected to continue to perform at strong levels, albeit residential construction is forecast to moderate in both countries”
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