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Boral Announces Half-Year Profit (posted 3/12/08)

March 12, 2008
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Boral Limited recently announced a profit after tax of $132 million (~ $122 million U.S.) for the half-year ended December 31, 2007.

Boral Limited recently announced a profit after tax (PAT) of $132 million (~ $122 million U.S.) for the half-year ended December 31, 2007, a 10% or $15 million (~ $14 million U.S.) decrease on the PAT for the half-year ended December 21, 2006. A 5% increase in sales revenue to $2.6 billion (~ $2.4 billion U.S.) reflects a 12% lift in Australian revenues due to price improvement, volume gains and growth initiatives, which more than offset a 19% fall in U.S. revenue due to the significant decline in U.S. housing activity.

The strong performance from Boral’s Australian operations was underpinned by strength in most markets outside of New South Wales. The 15% increase or $42 million (~ $39 million U.S.) lift in Australian EBITDA did not, however, offset the predominantly U.S. housing-related $64 million (~ $59 million U.S.) decline in offshore EBTDA earnings. Boral’s EBITDA was down 6% to $360 million (~ $332 million U.S.).

“The half-year result reflects a notable geographical shift in Boral’s earnings due to the solid lift in results from our Australian operations and the deep contraction in the U.S. housing market,” said Rod Pearse, chief executive officer and managing director. “Australian earnings accounted for around 90% of total earnings, up from 74% a year ago. Boral’s Australian performance was pleasing. EBITDA earnings from Construction Materials was up 15% on the back of solid pricing outcomes, strong volumes from infrastructure project work and non-dwellings activity, and a lift in first half Quarry End Use earnings. Building Products delivered an improved result with EBITDA up 14%, despite the continued housing downturn in New South Wales and a weaker housing market in Western Australia.

“In the U.S., the severe downturn in single family home construction across all major markets continued to negatively impact our U.S. brick and roof tile businesses. Capacity rationalization and cost reduction initiatives continue to mitigate the adverse impacts of the downturn, with brick and concrete roof tile volumes down a further 20% and 43%, respectively, during the half year. Earnings from our U.S. construction materials business improved.

“While there is considerable uncertainty around U.S. housing activity and subject to weather, we expect that Boral’s profit after tax in FY 2008 will be approximately 15% lower than the $298 million (~ $275 million U.S.) reported in FY2007.”

The company’s website is located at www.boral.com.au.

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