Adelaide Brighton unveils strong year results

According to the company’s financial results for the year ended 31 December 2017, revenue increased 11.7 per cent to $1.5 million, while its earnings before interest and tax (EBIT) marginally increased 0.2 per cent to $266.5 million. In addition, Adelaide Brighton’s net profit after tax rose 2.2 per cent to $182.1 million while its profit before tax slightly increased – by 0.1 per cent – to $254.4 million.

According to a company statement, strong demand across residential, non-residential and infrastructure projects throughout Victoria, New South Wales and Queensland, as well increased demand in South Australia, reinforced Adelaide Brighton’s steady position within the local market.

“Concrete and aggregate revenue improved significantly, driven by higher volumes, stronger prices and control of costs,” it continued. “Sales volumes for concrete increased by more than a third because of strong demand in the eastern states and acquisitions; aggregates volumes also benefited from increased South Australian infrastructure demand.

“Like for like concrete prices increased three per cent and aggregates prices rose by more than five per cent.”

Aggregate results

Adelaide Brighton’s aggregate volumes were up in 2017 due to several acquisitions and a recovery in SA infrastructure demand. This demand also offset reduced project volumes in other markets. The company is confident its NSW quarry operations are competitively positioned to supply demand growth in Sydney and benefit from strengthening aggregate prices.

The company’s EBIT and revenue were enhanced by the acquisition of two quarry businesses. The first, based in Melbourne, was a hard rock site that was part of its buyout of Central Pre-Mix Concrete and Quarry. The second was two active quarries that were part of Holcim’s concrete and aggregate assets in the Northern Territory. The Holcim buyout also includes access to further potential quarry leases in the NT.

Adelaide Brighton also profited from joint ventures (JV) in Batesford Quarry, near Geelong, and Lake Boga Quarries, in northern Victoria. The latter JV is run with EB Mawson & Sons, in which Adelaide Brighton enjoys a 50 per cent stake in ownership.

The company’s 2017 consolidated profits from joint ventures and associations totalled almost $38 million.

While concrete product earnings had decreased due to lower volumes and “lower production efficiency”, Adelaide Brighton’s CEO and managing director Martin Brydon was confident investment in a new plant would “drive efficiencies and sales growth in the medium term”.

“We believe our focus on cost controls and operational improvements, our commitment to investing in our vertical integration strategy, combined with what we expect to be a period of strong demand, will support attractive shareholder returns,” Brydon said.

In particular, Adelaide Brighton has entered into new gas and electricity contracts in SA to ensure continued energy supply for its Birkenhead and Angaston cement manufacturing plants and Klein Point Quarry in SA’s Yorke Peninsula.

The company statement predicted that “strong” demand for construction materials would continue throughout 2018.

Adelaide Brighton is a local manufacturer of cement, lime and aggregates that supplies construction materials to Australia’s construction, engineering, infrastructure and resource industries.

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