James Hardie Announces Adjusted Net Operating Profit of US$65.9 Million for Q3 Fiscal Year 2019 & US$226.7 Million for the Ni...
04 Fevereiro 2019 - 11:45PM
Business Wire
James Hardie today announced results for the third quarter of
fiscal year 2019 and the nine months ended 31 December 2018:
- Group Adjusted net operating profit of
US$65.9 million for the quarter and US$226.7 million for the nine
months, a decrease of 10% and an increase of 8%, respectively,
compared to the prior corresponding periods (“pcp”);
- Group Adjusted EBIT of US$90.6 million
for the quarter and US$304.6 million for the nine months, a
decrease of 10% and an increase of 3%, respectively, compared to
pcp;
- Group net sales of US$586.2 million for
the quarter and US$1,881.8 million for the nine months, an increase
of 18% and 23%, respectively, compared to pcp;
- North America Fiber Cement Segment
volume increased 1% for the quarter and 4% for the nine months,
compared to pcp;
- North America Fiber Cement Segment EBIT
margin excluding product line discontinuation expenses of 22.3% for
the quarter and 23.3% for the nine months;
- Asia Pacific Fiber Cement Segment EBIT
margin of 21.3% for the quarter and 23.0% for the nine months;
- Europe Building Products Segment
Adjusted EBIT margin excluding costs associated with the
acquisition of 9.2% for the quarter and 10.3% for the nine months;
and
- The Fermacell acquisition closed on 3
April 2018 and is included in the financial results for the nine
months of fiscal year 2019.
CEO Commentary
James Hardie CEO Jack Truong said, “Our North America Fiber
Cement Segment delivered modest top line growth of 2% for the
quarter and 7% for the nine months. The North America housing
market demand was soft across most geographies and customer
segments. Our exteriors business continues to improve and grow
slightly above our addressable market, but below our expectations.
Our management team is transforming our commercial strategy and
implementing Lean manufacturing as our operating approach in North
America plants. We are confident these transformations will lead to
an improvement in our execution and results."
He continued, “Within our Asia Pacific Fiber Cement Segment, our
Australian and Philippines businesses continued to deliver
excellent top line growth of 12% and 13% in local currency for the
quarter and nine months, respectively."
Dr Truong added, “Our Europe Building Products Segment delivered
strong net sales compared to the prior corresponding periods, on a
pro-forma basis up 8% in local currency for the quarter, and an
Adjusted EBIT margin excluding costs associated with the
acquisition of 9.2% for the quarter and 10.3% for the nine
months. We continue to be encouraged by the early indicators
from our European business."
He concluded, “Our consolidated group results reflected steady
financial performance in an inflationary raw materials, freight,
and foreign exchange environment, and soft underlying housing
market demand in our primary markets."
Outlook
We expect to see modest growth in the US housing market to
continue through the remainder of fiscal year 2019. The single
family new construction market and repair and remodel market growth
rates in fiscal year 2019 are expected to grow, albeit at a growth
rate lower than that in fiscal year 2018. The Company expects new
construction starts between approximately 1.2 million and 1.3
million.
We expect our North America Fiber Cement segment EBIT margin to
be in the middle of our stated target range of 20% to 25% for
fiscal year 2019. This expectation is based upon the Company
continuing to improve operating performance in its plants,
continuing to experience current inflationary trends for input
costs, and a strong US dollar.
Net sales from the Australian business are expected to continue
to trend above the average growth of the domestic repair and
remodel and single family detached housing markets in the eastern
states of Australia.
Full Year Earnings Guidance
Management notes the range of analysts’ forecasts for net
operating profit excluding asbestos for the year ending 31 March
2019 is between US$297 million and US$311 million. Management
expects full year Adjusted net operating profit to be between
US$295 million and US$315 million assuming, among other things,
housing conditions in the United States continue to improve in line
with our assumed forecast of new construction starts, input prices
remain consistent and an average USD/AUD exchange rate that is at,
or near current levels for the remainder of the year. Management
cautions that although US housing activity has been improving,
market conditions remain somewhat uncertain and some input costs
remain volatile.
The comparable Adjusted net operating profit for fiscal year
2018 was US$291.3 million. The Company is unable to forecast the
comparable US GAAP financial measure due to uncertainty regarding
the impact of actuarial estimates on asbestos-related assets and
liabilities in future periods.
Further Information
Readers are referred to the Company’s Condensed Consolidated
Financial Statements and Management’s Analysis of Results for the
third quarter and nine months ended 31 December 2018 for additional
information regarding the Company’s results, including information
regarding income taxes, the asbestos liability and contingent
liabilities.
As of 30 June 2018, the Company changed its reportable operating
segments. Previously, the Company reported on four operating
segments: (i) North America Fiber Cement, (ii) International Fiber
Cement, (iii) Other Businesses, and (iv) Research and Development.
As of 30 June 2018, the Company began reporting on five operating
segments: (i) North America Fiber Cement, (ii) Asia Pacific Fiber
Cement, (iii) Europe Building Products, (iv) Other Businesses, and
(v) Research and Development. The significant changes to how
certain businesses are reported in the new segment structure are as
follows: Our European Fiber Cement business as well as the newly
acquired Fermacell business are now reported as the Europe Building
Products segment, and the remaining businesses that were
historically reported in the International Fiber Cement segment are
now reported in the Asia Pacific Fiber Cement segment. The Company
has revised its historical segment information at 31 March 2018 and
for the third quarter and nine months ended 31 December 2018 to be
consistent with the new reportable segment structure. The change in
reportable segments had no effect on the Company's financial
position, results of operations or cash flows for the periods
presented. Readers are referred to Note 15 of our condensed
consolidated financial statements for further information on our
segments.
Use of Non-GAAP Financial Information; Australian Equivalent
Terminology
This Media Release includes financial measures that are not
considered a measure of financial performance under generally
accepted accounting principles in the United States (GAAP), such as
Adjusted net operating profit and Adjusted EBIT. These non-GAAP
financial measures should not be considered to be more meaningful
than the equivalent GAAP measure. Management has included such
measures to provide investors with an alternative method for
assessing its operating results in a manner that is focused on the
performance of its ongoing operations and excludes the impact of
certain legacy items, such as asbestos adjustments. Additionally,
management uses such non-GAAP financial measures for the same
purposes. However, these non-GAAP financial measures are not
prepared in accordance with US GAAP, may not be reported by all of
the Company’s competitors and may not be directly comparable to
similarly titled measures of the Company’s competitors due to
potential differences in the exact method of calculation. For
additional information regarding the non-GAAP financial measures
presented in this Media Release, including a reconciliation of each
non-GAAP financial measure to the equivalent US GAAP measure, see
the section titled “Non-US GAAP Financial Measures” included in the
Company’s Management’s Analysis of Results for the third quarter
and nine months ended 31 December 2018.
In addition, this Media Release includes financial measures and
descriptions that are considered to not be in accordance with US
GAAP, but which are consistent with financial measures reported by
Australian companies, such as operating profit, EBIT and EBIT
margin. Since the Company prepares its Consolidated Financial
Statements in accordance with US GAAP, the Company provides
investors with a table and definitions presenting cross-references
between each US GAAP financial measure used in the Company’s
Consolidated Financial Statements to the equivalent non-US GAAP
financial measure used in this press release. See the sections
titled “Non-US GAAP Financial Measures” included in the Company’s
Management’s Analysis of Results for the third quarter and nine
months ended 31 December 2018.
Forward-Looking Statements
This Media Release contains forward-looking statements and
information that are necessarily subject to risks, uncertainties
and assumptions. Many factors could cause the actual results,
performance or achievements of James Hardie to be materially
different from those expressed or implied in this release,
including, among others, the risks and uncertainties set forth in
Section 3 “Risk Factors” in James Hardie’s Annual Report on
Form 20-F for the year ended 31 March 2018; changes in general
economic, political, governmental and business conditions globally
and in the countries in which James Hardie does business; changes
in interest rates; changes in inflation rates; changes in exchange
rates; the level of construction generally; changes in cement
demand and prices; changes in raw material and energy prices;
changes in business strategy and various other factors. Should one
or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those described herein. James Hardie assumes no
obligation to update or correct the information contained in this
Media Release except as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20190204005846/en/
Jason MieleVice President, Investor and Media
RelationsTelephone: +61 2 8845 3352Email:
media@jameshardie.com.au
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