Adbri says there is strong HomeBuilder demand in SA, as it shores up it future at Sellicks
Adbri says its diversified customer portfolio has proven a buffer in these uncertain times, as it brings back dividends for investors.
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Adbri will consider a push for greener fuel at its Birkenhead cement plant and has secured the title over its Sellicks Hill Quarry land securing a resource for the next seven decades.
Managing director Nick Miller also said the company was seeing strong demand flowing through from the Federal Government’s HomeBuilder building and renovation subsidy scheme in South Australia, while contract wins with BHP at Olympic Dam and OZ Minerals at Prominent Hill reflected the solidity of the mining sector throughout the COVID-19 crisis.
The company, which changed its name from Adelaide Brighton earlier this year, reported its half year revenues have dropped 7 per cent to $700.7 million, with the impact of bushfires, floods and smoke in New South Wales and Queensland dented results in those markets.
Underlying net profit after tax of $47.6 million was 13.9 per cent lower, and net profit attributable to shareholders was $29.1 million, compared with a $17.9 million loss for the first half last year.
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Mr Miller said the company’s balanced portfolio across sectors such as resources, large infrastructure projects and residential and commercial construction meant the company had a hedge against weakness in any one area.
“The mining sector has continued to be strong ... and we’ve seen strong demand in the lime sector on the back of where minerals prices and gold prices are,’’ he said.
“In South Australia, the market has held for us. We have been successful in a number of infrastructure projects.
“What we have seen as well is some immediate impact from the (HomeBuilder) grant. Out of all the states we operate in the uptake has been really strong and we’re starting to see the early stages of that flow through.’’
Adbri said it had bought a parcel of land adjoining its Sellicks Hill quarry, which Mr Miller said secured an “intergenerational asset’’ for the business, with about 75 years of resources still remaining at that asset.
At Birkenhead there had been various capital works completed with more planned, and Mr Miller said the viability of moving to using 50 per cent recycled fuel would be assessed, with the site already using a large proportion of demolition waste as fuel.
“We’re going through trials to increase the volume ... that puts us in the position where we could aspire to have 50 per cent of our fuel in the future from recycled material. It does put us with the greenest cement in Australia.’’
The company will pay a fully franked interim dividend of 4.75c per share.
Adbri said it would maintain its stance, implemented in April, of not providing guidance for the full year due to the uncertainty surrounding COVID-19. Adbri shares were steady at $2.39.