According to Adelaide Brighton’s financial results for the full year ended 31 December, 2014, the company’s net profit after tax increased 14.3 per cent to a record $172.7 million while its earnings before interest and tax rose 11.1 per cent to set another record at $247.5 million.
Overall, the company’s revenue increased 8.9 per cent to $1.3 billion, with the company’s strong performance over the year attributed to growth in all construction markets except Victoria, which declined, and South Australia, which remained stable.
Adelaide Brighton’s acquisitions last year were also said to have contributed to the positive figures. As previously reported by Quarry, the company purchased a limestone quarry in Angaston, SA from Penrice Soda Holdings in July, as well as two other concrete and aggregate businesses – Adelaide-based Direct Mix Concrete and Townsville’s BM Webb Construction Materials – the following month.
The full year report indicated that the assets acquired produced approximately two million tonnes of aggregate and more than 250,000 m3 of concrete per annum, contributing towards the more than six million tonnes and 1.5 million m3 of pre-mix concrete produced annually by Adelaide Brighton’s combined concrete and aggregate businesses across SA, Victoria, New South Wales and Queensland.
The report stated that financial benefits from the acquisitions – estimated at $4.4 million per annum – were expected to be achieved this year.
Improvements and outlook
Adelaide Brighton’s cement and clinker sales volume increased three per cent in 2014 with average selling prices for these products also rising above the CPI. Lime sales volume, on the other hand, decreased seven per cent, and average lime selling prices increased to just below the CPI.
A number of operational improvement initiatives delivered savings of $19.7 million over the year, including corporate restructuring efforts and the rationalisation of the company’s clinker production operation in Munster, Western Australia.
Energy efficiency programs were also said to have resulted in benefits of $4.9 million, and according to media sources, the company plans to apply for federal funding through the Emissions Reduction Fund this year in order to continue decreasing its energy costs.
Adelaide Brighton was positive in its outlook for 2015, predicting that sales volumes of lime, cement and clinker would be similar to or greater than those achieved in 2014. It forecast that cement sales would increase in WA and that demand across Victoria, NSW and Queensland would improve. It was also noted that price increases would occur from March and April this year for its cement, clinker, aggregates, concrete and concrete products.
In addition, it was anticipated that the repeal of the carbon tax, potential transport cost savings and other benefits would have positive flow-on effects for 2015.