Building products group James Hardie is forecasting growing sales of its fibre cement panels on the back of a spurt in housing construction in the US.
The company today posted an 8% rise in net profit to $US232 million ($A302 million) for the nine months to December. Sales were up 109% to $US1.42 billion ($A1.8 billion).
“The company expects to see steady growth in the US housing market in fiscal year 2017, assuming new construction starts between approximately 1.2 and 1.3 million,” James Hardie said in a market update.
“We expect net volume growth for the North America fibre cement segment to likely outpace overall market growth by mid-to-high single digits.”
James Hardie is among a group of larger Australian companies with their own manufacturing within the US, which would escape most of the negative effects of any new border tax imposed by the President Donald Trump’s new administration in Washington.
Housing starts grew by a better than expected 11.3% in the US in the year to January.
And the new administration has reportedly compiled a list of 50 infrastructure projects, totaling $US137.5 billion ($A179 billion) in investment, that it wants to undertake.
James Hardie has downgraded slightly the outlook for full year profit to be between $US245 million ($A315 million) and $US255 million ($A332 million). Analysts had forecast net operating profit between $US252 million ($A328 million) and $US269 million ($A351 million).
“Management cautions that although US housing activity has been improving, market conditions remain somewhat uncertain and some input costs remain volatile,” the company said.
For the nine months to December, fibre cement sales in the US were up 12% to $US1.105 billion ($A1.44 billion). The earnings margin was 24.2% and the full year forecast is between 20% to 25%.
This chart shows James Hardie revenue and volume for fibre cement boards against a seasonally adjusted estimate of housing starts by US Census Bureau:
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