Editor's Desk

Boral annual loss equals more cuts

Boral will outsource functions along with overhauling a range of other costs such as property leases.
Earlier this year Boral cut an estimated 800 jobs as part of a $90 million cost cutting program to revive the group’s fortunes.
With these new cost cutting measures the company is pursuing rationalization specifically in the bricks and timber area. 
These measures need approval from the Australian Competition and Consumer Commission as they involve mergers or asset sales to competitors.
Boral managing director Mike Kane said the new cost cuts would be finalised by the annual general meeting on October 31. 
He said the round of cost reductions would not be the size of the January cuts, but would be ”significant”.
”This is long term and more meaningful than head count with decisions around outsourcing, leasing arrangements,? Kane said.
The focus is expected to be at the operating level on supply contracts and procurement.
According to Boral, parts of the Australian building products industry were in structural decline forcing the main players to cut costs hard to stay in business.
?Boral?s largest division, Construction Materials & Cement, delivered a strong 16% EBIT (earnings before interest and taxation) improvement on the back of major project activity, prior year acquisitions and property sales,? said Kane.
?The division?s performance is expected to remain strong in the year ahead despite substantially lower property sales and a slow down in major project work.
?Boral Gypsum delivered softer underlying earnings in FY2013 due to cyclical challenges in some Asian markets and the cost impacts of investment ramp-ups in China and Indonesia. 
?The business remains extremely well positioned for future earnings growth in Asia and Australia and has invested in three additional board lines that will increase net capacity in Asia by 16%.?
Sources: The Canberra Times, AAP, The Australian

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