James Hardie first quarter profit dives 89pc

James Hardie has cited coronavirus disruption while posting a big fall in first quarter profit, as it gained US market share.

James Hardie has been hit hard by the pandemic.

Buildings supplies company James Hardie Industries has remained bullish about its North American operations despite unveiling a quarterly net profit figure down 89 per cent on the prior period.

The company said that for the three months through June, it had continued to gain market share in North America, and growth in that market was set to continue into the next quarter.

Net profit attributable to shareholders for the three months through June 30 sank to $9.4m, down 89 per cent on the same period a year ago.

In a statement to the market on Tuesday, James Hardie delivered a net operating profit – which excludes asbestos liabilities – of $US89.3m ($125.6m) for the three months through June, in line with the same period last year. James Hardie continues to face compensation claims from workers who mined asbestos and developed deadly lung diseases as a result.

While the impact of the COVID-19 pandemic remained uncertain, the company said that full-year adjusted net operating profit was expected to be between $US330m and $US390m, compared to $US352.8m in 2020.

The quarterly result was slightly below the expectations of RBC analysts, but the guidance was better than expected. Shares in the company gained 6.8 per cent to close at $32.22 each on Tuesday.

“In February 2019, we launched a global strategy to transform James Hardie from a big, small company to a small, big company that is capable of delivering growth above market with strong returns, consistently,” chief executive Jack Truong said.

“This is now our fifth consecutive quarter of delivering strong results in-line with the core goal of that strategy: growth above market and strong returns.

“I am very pleased to note that not only do we remain on-track with our transformation, but we are also accelerating our transformation during the pandemic.”

Dr Truong said that all of James Hardie’s plants had continued to operate through the pandemic, and as a result, its commercial transformation had accelerated so the company managed to gain significant market share during the quarter through June.

With that positive momentum, Dr Truong said the company expects its adjusted earnings before interest and tax margin in its North American business to grow by between 27 per cent and 29 per cent over the second quarter.