Review of results full year ended 31 March 2018
9 May 2018    

CSR announces 16%1  rise in full-year net profit (before significant items)2, to $212.7 million
Full-year net profit (after significant items) up 6% to $188.8 million

CSR Limited (CSR) reported a 16% increase in net profit after tax (before significant items) to $212.7 million for the year ended 31 March 2018 (YEM18).  After significant items, net profit after tax was $188.8 million, up 6%.
CSR has continued its track record of growth in earnings which improved for the fifth consecutive year.  Earnings before interest, tax and significant items (EBIT) of $323.8 million was up 9%.  This lift in earnings was driven by growth from Building Products, which delivered a record EBIT of $214.1 million and increased Property earnings of $47.8 million, up from $15.0 million.
The growth in earnings led to operating cash flows of $249.2 million and a 4% increase in the full-year dividend to 27.0 cents per share. 
“CSR’s Building Products business continues to grow as we capitalise on the strength of the residential construction market in Australia.  We have also increased our exposure to commercial markets which are forecast to grow over the next few years.   Our strategy to improve operational performance has ensured our EBIT margins remained stable, despite a 12% increase in energy costs this year,” said CSR Managing Director Rob Sindel.
Gyprock delivered another strong result, with investment in four new Gyprock Trade Centres helping to maintain its market-leading position. Bradford continued to grow earnings across its range of insulation and energy efficiency products while PGH Bricks also increased earnings despite significantly higher gas costs.  Hebel autoclaved aerated concrete increased earnings with market share growth in both the detached and multi-residential market.
Viridian’s EBIT of $3.5 million was down from $7.0 million in the previous year due to operational issues at the new commercial factory at Ingleburn, NSW, while energy costs increased by $4 million.  This was partly offset by improvement across the other Viridian businesses as it took advantage of demand for higher margin insulated glass products.

Aluminium EBIT of $79.5 million was down from $93.1 million as the higher realised aluminium price and increased production at the Tomago smelter was offset by increased raw material costs and the significant step-up in energy costs experienced during the last five months of year.  We have also increased our hedging position following the recent increase in aluminium prices with 74% of our net exposure hedged for YEM19 and 70% in YEM20.

“CSR ended the year to 31 March 2018 with net debt of $14.3 million, giving us capacity to continue to invest in additional growth opportunities and property projects to improve shareholder returns.
“The $75 million expansion of the Hebel factory is due for completion in March 2019.  Additional property investment is expected this year as we accelerate the development of major projects in western Sydney as the market for industrial sites and residential property remains strong,” Mr Sindel added.

Looking at the outlook for the year ending 31 March 2019 (YEM19), CSR confirmed:
• Building Products and Viridian – Recent building approvals remain strong with detached housing at its highest level in two years.  This supports the current level of activity for the year ahead.   Viridian’s operational performance in Australia and New Zealand has improved in recent months with the business on track to improve earnings in the year ahead.
• Currently 74% of net Aluminium exposure for YEM19 is hedged at an average price of A$2,590 per tonne (excluding ingot premiums) as of 30 April 2018.  Earnings will be impacted by the full year effect of higher power related costs.
• Two Property transactions were announced in the first week of YEM19 resulting in EBIT of approximately $37 million.  This included the completion of Stage 5 at Chirnside Park, VIC and the sale of the 10-hectare surplus industrial site at Horsley Park, NSW which is expected to be recorded in the second half of the year. 

Media/analyst enquiries:
Andrée Taylor
CSR Limited Investor Relations
Tel:  +61 2 9235 8053

1 All comparisons are to the year ended 31 March 2017 (YEM17) unless otherwise stated.

2 EBIT and net profit are before significant items. They are non-IFRS measures used internally by management to assess the performance of the business and have been extracted or derived from CSR’s financial statements for the year ended 31 March 2018 (YEM18).