Brickworks profits down on subdued building activity

Building products manufacturer and investment company Brickworks has posted a Statutory Net Loss After Tax of $119 million for the year ended 31 July 2024.

The Underlying Profit After Tax from continuing operations was $61
million, while group Underlying Earnings Before Interest, Tax, Depreciation and Amortisation (‘EBITDA’) was $157 million.

Earnings were adversely impacted by a non-cash property devaluation of $215 million in property holdings and a $15 million loss on property sales, compard to $269 million profit in FY23.

A further non-cash impairment of $135 million was recorded, primarily in relation to Austral Masonry and Brickworks North America which have been impacted over the past six months by a deterioration in building activity.

In response to the weaker demand, production has been scaled-back, resulting in delayed realisation of efficiency benefits from major investments and plant rationalisation activities.

Brickworks Chief Executive Officer Mark Ellenor said: “We are now moving through a cyclical low in building activity, with residential approvals in Australia at the lowest level for more than a decade.

“In response, we have implemented a range of re-structuring initiatives, to remove costs and support margins.

“These initiatives included the consolidation of Austral Bricks and Austral Masonry into one operating division, a restructure of Bristile Roofing and a rightsizing of divisional support functions.”

Ellenor said that during the second half of the year, the commissioning process at Plant 2 in New South Wales was substantially completed, with the highly automated plant now operating at design capacity

Building Products North America EBITDA was up 9% to $43 million, while Building Products Australia EBITDA up 2% to $102 million.

Ellenor said: “Our Building Products businesses in Australia and North America are facing challenges over the next 12 months, with subdued building activity across many of our key markets.

“As such, we are planning temporary plant closures throughout FY25 to undertake maintenance and control inventory.

“Looking beyond the short-term market weakness, we are well placed to deliver strong returns when market conditions improve, following our recent plant investments, re-structuring and portfolio rationalisation activities.”

Picture: Brickworks/