Adbri and its subsidiary Cockburn Cement have withstood the trials of 2020 thanks to demand in Western Australia, according to Adbri’s full year results.
Across the country, Abdri reported cement volumes were down 7.1 per cent, increasing its price by 1.4 per cent. In contrast, Western Australian demand in residential construction and infrastructure helped to increase local cement volumes, while the mining sector remained reliably strong.
The company’s underlying net profit after tax was down just 7 per cent to $115.6 million, keeping it above the guidance it ultimately withdrew in April as COVID-19 began to take hold.
Adbri’s chief executive officer Nick Miller said he was happy with the company’s results in the face of adversity.
“In the context of the challenging operating environment, the financial outcomes we delivered for FY20 are better than we had expected and reflect the successes of our cost-out and business improvement programs,” he said.
“Adbri also benefitted from improving demand in the Western Australian market during the period which offset slowing demand in east coast markets, particularly in New South Wales.”
Similarly, in lime sales, Western Australian demand remained strong while national prices dropped.
The Federal Government’s HomeBuilder program helped to drive aggregate sales up five per cent as quarry products were shovelled into infrastructure, road maintenance and civil projects.
Miller said he expects his company to profit from the rebounding economy.
“Mining demand continues uninterrupted while the construction materials sector is expected to benefit from various government stimuli, particularly to fast-track ‘shovel ready’ construction projects including infrastructure spending, home-building grants and stamp duty relief, all of which position Adbri to play a key role in building a better Australia.”
Earlier in the year, Adbri announced a $199 million upgrade to its Kwinana cement operation, expecting it to save the company $19 million in its first year of operation, due in mid-2023.