Boral Limited (ASX: BLD), established in 1946, is based out of North Sydney, Australia and engaged in the manufacturing and sale of building and construction materials in the United States, Australia, and Asia. The company caters to the residential and non-residential construction as well as the engineering and infrastructure markets.
The product range includes blocks, bricks, cementitious materials, concrete, pavers and retaining walls, plasterboards, quarry materials, roof tiles, roofing, masonry and other relevant materials while the other services comprise roof tile installation, asphalt laying, spray sealing, concrete placing, and empty pallet collection services. Also, the company assist in transportation, landfill, and property activities.
Boral recently announced its results for the Half-year ended December 31st, 2019 (1H FY2019), presenting the business overview, financial performance, future outlook as well strategic and organisation update. The report suggests that there was growth in Australian roads, highways, subdivisions & bridges (RHS&B) infrastructure demand with soft residential market conditions. The US housing and construction markets remained strong in 1H FY2019. Besides, there were mixed market conditions in Asian countries with general positive growth in the Chinese market and subdued market activity recorded for Korea, Indonesia and Thailand.
As per the report, the company reported revenues of $ 2,990 million, up by 2% on the corresponding prior period but the EBITDA reduced to $ 485 million by 3%.
Although the sale of the Denver Construction Materials in July 2018 and the US Block business in November 2018 caused EBITDA decline of $ 15 million, overall EBITDA for 1H FY2019 was broadly steady on the prior year first half. Besides, an income tax expense of $ 48 million, and an effective tax rate of 19.4% were lower than the prescribed FY2019 guidance, reflecting recognition of previously unrecognised tax losses and a favourable adjustment to tax provisions.
The Net Profit after tax (NPAT) for the company was valued at $ 200 million, down 6% on $ 214 million in the corresponding prior period. The operating cash flow amounted to $ 253 million, an increase of 17%, primarily due to lower restructuring and integration payments of $ 19 million compared to $ 82 million in the prior half year. Moreover, the company also posted capital expenditures of $ 183 million, including $ 132 million of stay-in-business and $ 51 million of growth expenditure, indicating a rise on $ 164 million in the prior year first half. The net debt was also high at $ 2,295 million, at the end of the period, reflecting a decline on the previously recorded $ 2,453 million at the end of June 30th, 2018.
As per the outlook suggested, Boral’s FY2019 EBITDA is estimated to be higher than FY2018 for continuing operations with a skew towards the second half of 2019 (2H FY2019).
Boral has a market capitalisation of AUD 5.6 billion and ~1.17 million outstanding shares. On February 26th, the BLD stock is trading at AUD 4.815, down 1.735%, indicating an intra-day loss of AUD 0.085 (as at 1:05 PM AEST).
At the end of the half year, the company also declared an interim dividend of 13.0 cents per share, franked by 50%, to be paid to the shareholders on March 15th, 2019, reflecting an increase of 4% over the prior period and a pay-out ratio of 76%.
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