Boral has been less affected by COVID-19 east coast lockdowns than it predicted over the September quarter, with earnings only down by $33 million.
The construction materials company predicted in August that the months of July, August and September could equate to EBIT (earnings before income tax) losses of about $50 million.
This was forecast due to higher costs and lower volumes in Victoria and New South Wales.
“In New South Wales, where we derive more than 4 per cent of our Australian revenue, there was a sudden and dramatic impact in the second half of July due to COVID-related construction lockdowns in Greater Sydney,” said Boral chief executive officer and managing director Zlatko Todorcevski at the company’s annual general meeting (AGM) on 28 October.
This included 26 per cent lower concrete volumes for September 2021 compared to September 2020, while July and August combined for 36 per cent lower concrete volumes.
“In Victoria, our second largest geographic exposure, we experienced encouraging volumes for most of the period until mid-September when a snap shutdown of construction occurred,” Todorcevski said.
While the effects of lockdown weren’t as much as forecast, Todorcevski said they are expected to lag into the coming months.
“We are likely to see some trailing impacts from COVID restrictions in the remainder of FY2022, including some further volume impacts in October, particularly in Victoria,” he said.
“At this stage though we don’t expect the adverse EBIT cumulative impact for the year to exceed $50 million, which was the original amount foreshadowed for the first quarter only.”
In more positive news, quarry volumes were up by about three per cent, driven by Boral’s Asphalt business.
The company’s AGM also saw a vote on the return of $3 billion to Boral shareholders, following the divestment of multiple building products businesses, as previously announced.
This was resoundingly approved by shareholders with 99.82 per cent voting in favour.
For further details about the Boral AGM, including addresses from Todorcevski and Boral chairman Ryan Stokes, slides about the first quarter FY2022 trading, and the outcomes of business, visit Boral’s ASX page.
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