CSR pays dividend to shareholders despite drop in first-half profit

  • November 02, 2020 01:54 PM AEDT
  • Team Kalkine
    Team Kalkine
    Team Kalkine
    16964 Posts

    Team Kalkine comprises of experts who understand various markets nuances and are enthusiastic and passionate to provide best possible offerings in the form of insights and stories. The team has rich experience of working across different markets with...

CSR pays dividend to shareholders despite drop in first-half profit

Summary

  • CSR Limited posted a decline of 15 per cent in net profit to A$58.7 million for HY21 ended 30 September 2020
  • A 6% decline in the revenue to A$1,075.5 million was also seen due to slowdown in residential construction and lower Aluminium prices.
  • Higher cost reduction and lower Aluminium price led to a net decline in EBIT of 17% to A$94.4 million.
  • Despite some red numbers, the group announced 8.5 cps of interim dividend and 4.0 cps of a special dividend, both fully franked.
  • Nigel Garrard has been appointed as a non-executive director, effective from 1 December 2020.
  • The stock inched up by ~5% to $4.63, after breaking four days losing streak

On 2 November 2020, CSR Limited (ASX: CSR) released its half-year financial results ended 30 September 2020 with a 15% downtick in statutory net profit after tax to A$58.7 million. The NPAT before significant items stood at A$66.4 million and approx. eight million restructuring cost was deducted towards team reorganisation and streamlining.

The revenue was also down by 6%, from A$1,150.1 million in HY20 to A$1,075.5 million in HY21, primarily due to slowdown in residential construction and lower Aluminium prices.

Image Source: CSR Limited’s ASX Update dated 2Nov 2020

Image Source: CSR Limited’s ASX Update dated 2Nov 2020

The group EBIT was reported at A$94.4 million, down by 17% from A$113.1 million in HY20. The decreased EBIT reflected lower Aluminium prices and cost reduction. The bifurcation of EBIT is 

  1. Building Products – increased from A$95.9 to A$96.3 on account of cost reduction and factory efficiency measures.
  2. Property – No material transactions were recorded, however transaction of Horsley Park in 2H YEM21 is expected to garner A$53 million of EBIT
  3. Aluminium– Decline in the Aluminium price, a massive fall of 76% is witnessed in EBIT from A$25.4 million to A$6.2 million.
  4. Corporate – Like the previous corresponding period, this segment yielded negative EBIT, from (A$6.0) to (A$9.8).

Strong Cashflow generation 

The group has improved its working capital following destocking initiatives and managing production to sales levels. This has led to an increase of 5% in the operating cash flow, from A$116.4 million to A$121.7 million. Net movement in working capital has also improved from negative A$11.1 million to A$32.5 million.

The group has also reduced the capital expenditure in order to preserve more cash which has come down from A$66 million to A$53 million. Although, the total Capex for YEM21 expected to be approximately A$112 million, including A$42 million towards a property.

Dividend Distribution

The group has maintained a strong liquidity position and maturity profile. Despite a 15% downtick in the NPAT, a fully franked interim dividend of 8.5 cps has been announced. Another special fully franked dividend of 4.0 cps has been declared, reflecting visibility of the first-half operating environment

The full-year dividend for YEM21 (excluding special dividends) is expected to be in line with the group’s policy to maintain a payout ratio of 60-80% of full-year net profit after.

Nigel Garrard appointed as a non-executive director

The group also announced Nigel Garrard’s appointed to the board as a non-executive director, effective 1 December 2020.

He was the Managing Director & CEO of a packaging manufacturing company Orora Limited from 2013 to 2019. He also had a number of senior positions in the same industry. 

Stock Performance

The stock is trading at $4.63 (as at 1:03 PM AEDT), up by 4.988% on 2 November 2020. After four consecutive losing sessions, the stock is trying to break losing streak.

The stock has already fallen by 8.7% from its October high of $4.93 but trading comfortably above the March low of $2.75. The one-year return of the stock stands at negative 5%. 

 

 


Disclaimer
The website https://kalkinemedia.com/au is a service of Kalkine Media Pty. Ltd. (Kalkine Media) A.C.N. 629 651 672. The principal purpose of the content on this website is to provide factual information only and does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) or engage in any investment activity under discussion. We are neither licensed nor qualified to provide investment advice through this platform. In providing you with the content on this website, we have not considered your objectives, financial situation or needs. You should make your own enquiries and obtain your own independent advice prior to making any financial decisions.
Some of the images that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed on this website unless stated otherwise. The images that may be used on this website are taken from various sources on the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image. The information provided on the website is in good faith, however Kalkine Media does not make any representation or warranty regarding the content, accuracy, or use of the content on the website.

 

   
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK