With strong year-end reports and new executives on board, Boral and Adbri have plenty to celebrate.
Construction materials suppliers Boral and Adbri recently released their annual 2022 reports and both suppliers – the largest in the Australian quarry industry – have recorded strong results.
While both companies have faced challenges posed by the COVID-19 pandemic and other market factors, they have demonstrated a commitment to sustainability, safety and growth.
Vik Bansal has taken the helm as the new chief executive officer (CEO) of Boral, a leading global manufacturer and supplier of building and construction materials.
With a wealth of experience in the construction materials industry, Bansal has set his sights on improving the company’s performance in a challenging environment. Bansal was happy to report an improvement in key metrics despite inflationary and operational challenges the company faced.
“In my first set of financial and operational results for Boral, I am pleased to report a
half-on-half improved performance on key metrics amidst [the] challenging environment,” he said.
Boral’s 2022 statutory net profit after tax (NPAT) was reported at $961 million, including a post-tax significant gain of $811 million, in comparison to $389 million in financial year (FY) 2021.
Its underlying NPAT was reported at $150 million, down from $251 million in FY21.
The company reported an adjusted earnings per share (EPS) of 13.6 cents per share, a decrease from FY21’s 20.6 cents.
Bansal believes Boral can achieve even better results going forward, outlining a “flatter and broader” organisational structure that will make the company even more customer-focused and “closer to the frontline”.
At the core of Bansal’s strategy for Boral is the company’s commitment to safety.
Bansal reiterated the company’s “zero-harm” goal, saying employees’ wellbeing is Boral’s highest priority and the company is working on a significant program to improve safety performance.
“Safety is our highest priority, and our safety performance remains a key performance indicator for executives. Zero harm remains our goal, and a significant work program is underway to improve safety performance at Boral,” he said.
Boral is also committed to sustainability, with a focus on reducing carbon emissions. The company was the first in the global cement sector to set 2030 targets aligned with a 1.5°C pathway for Scope 1 and Scope 2 emissions.
Boral continues to make steady progress toward carbon emissions reduction targets, with its Scope 1 and Scope 2 emissions down eight per cent in FY22 compared to FY19. The company is working towards an interim FY25 goal of an 18 per cent reduction compared to FY19.
Boral expects to complete the chlorine bypass at the Berrima Cement Plant in NSW in the fourth quarter of FY23, which will enable higher use of alternative fuels from around 15 per cent in FY22 to 30 per cent by the end of FY23, and thereafter targeting 60 per cent by FY25.
“I believe that recarbonisation of concrete is not discussed enough and we intend to bring it to the table as part of the Boral decarbonisation journey,” Bansal said.
“We also continue to assess opportunities to transition to renewable electricity sources, with Boral entering into a renewable power purchase agreement during 1H [first half] FY23 and remain focused in accelerating penetration of our market leading lower carbon concretes.
“Further, we have expanded our circular materials management offering, which is already achieving positive results, and we are exploring further opportunities to grow our recycling business.”
Last year saw Adbri celebrate the 140th anniversary since its inception as Brighton Cement Works in South Australia in 1882.
Today, it is a leading manufacturer of cement, lime, concrete, aggregates, masonry products and industrial materials, serving customers in the construction, infrastructure, mining and retail sectors.
Adbri’s statutory NPAT was $102.6 million in 2022, down from $116.7 million in FY21. This drop was driven by higher operating costs as a result of inflation, particularly energy costs, and wet weather events.
The company’s underlying NPAT decreased 0.9 per cent to $118 million, down from $119.1 million in FY21. Excluding profits from property sales, however, meant the underlying NPAT was $77.7 million, down from $113 million in FY21, in line with the guidance range provided in October 2022.
“Adbri’s revenue grew 8.4 per cent year-on-year; however, our full-year financial performance was impacted by challenging macroeconomic factors including supply chain constraints, labour shortages, input cost inflation and rain events across the eastern seaboard of Australia that impacted our customers,” the chair of Adbri’s safety, health, environment and sustainability committee Michael Wright said.
Adbri’s focus on safety is paramount, with injury severity rates significantly reduced. Chairman Raymond Barro and new CEO Mark Irwin aim to instil a culture of ‘work safe, home safe’ throughout the group.
“At every level of the organisation, Adbri acknowledges [that] we still have more to do in delivering safety improvements across the business,” Barro and Irwin said in a statement.
“We are investing in engineering solutions and are focused on leadership behaviours, including visible leadership walks, critical control verifications, training across our workforce and contractor partners, and workplace inspections.
“We approach 2023 with a clear mandate to ensure our operations are safe, efficient and profitable, and our processes are simple, consistent and efficient,” they said.
“We are committed to our sustainability improvement journey and will continue to focus to meet our future goals, with belief that our drive for simplicity and effectiveness will power both our financial and sustainability performance.”
In line with its goals of improving sustainability, Adbri has released a net-zero emissions roadmap.
Adbri’s short-term emissions reductions target is a seven per cent absolute reduction in Scope 1 and Scope 2 emissions by FY24 compared to FY19. Since FY19, it has achieved a four per cent overall reduction and in FY21 achieved a two per cent reduction.
In FY22, Adbri’s total operational Scope 1 and Scope 2 greenhouse gas emissions reduced by eight per cent against its FY21 performance. The company also has medium-term targets outlined for cement, lime and electricity, which the company says are its main sources of emissions.
Cement has the goal of a 20 per cent reduction in Scope 1 emissions intensity by FY30.
In the 2022 sustainability report for the company, a five per cent emissions intensity reduction in cement product was achieved largely by increased refuse derived fuel usage at its Birkenhead operation in South Australia.
Lime has the goal of a 10 per cent reduction in Scope 1 emissions intensity by FY30, and electricity supply has the goal of 100 per cent zero emissions by FY30.
It’s these kinds of targets that helping drive the quarrying industry on its path to decarbonisation.