Review of Results - Full Year Ended 31 March 2019

8 May 2019   

CSR Building Products performing well and investing for future growth

CSR Limited (CSR) has reported a net profit after tax from continuing operations of $181.7 million (before significant items).

Building Products revenue of $1.7 billion, was up 1% with growth across most products and segments.  EBIT of $206.5 million net of $14 million invested in innovation and new building systems to deliver long-term growth.

Commenting on the results, CSR Managing Director Rob Sindel said, “CSR has invested in its portfolio of building products businesses during the last few years to increase the diversity of earnings and build a wider addressable market providing adaptability to changing market conditions. 

“The Building Products business performed well this year, despite the residential construction market slowing during the last few months.  This reflects our increased exposure to the non-residential market where CSR has been positioning its investments in both innovative product solutions and growth-linked capex.”

Property delivering as per guidance
"Consistent with its track record over the past decade, Property continues to be a significant source of earnings for CSR contributing $38.8 million in EBIT this year from a long-term pipeline of projects.

Strengthened financial position
“Optimisation of our portfolio combined with strong cash flow from operations means our financial position remains strong with net cash of $50.0 million as at 31 March 2019.  An additional $188 million in cash proceeds from previous transactions are to be received during the current financial year.  This provides flexibility to invest in new building systems and ongoing Property projects which are expected to deliver increased returns over the next few years.”

“In March 2019, we launched a $100 million share buyback to return surplus cash to our shareholders.” 

At the group level, CSR delivered EBIT from continuing operations of $265.0 million (before significant items), down 17%.  This lower result was expected due to higher electricity costs in Aluminium which delivered $36.6 million in EBIT down from $79.5 million last year. 

Statutory net profit after tax from continuing operations was $138.9 million.  Statutory net profit after-tax (including discontinued operations) was $78.0 million which included an after tax loss of $60.9 million related to the Viridian Glass business sold on 31 January 2019.

The board has resolved to pay a final dividend of 13.0 cents per share, franked at 50% which will bring the full year dividend to 26.0 cents per share. 

Update on Managing Director and CEO appointment
As previously announced, a search is underway to appoint a successor to Rob Sindel who signalled his intention to step-down as Managing Director and CEO of CSR this year.  This search is well progressed and the new appointment is expected to be announced prior to CSR’s Annual General Meeting to be held on 26 June 2019.

Regarding the outlook for the year ending 31 March 2020 (YEM20), CSR confirmed:

Building Products – Volumes in the first month of YEM20 remain consistent with the final quarter of YEM19.   Mixed economic signals make it difficult to predict building activity levels for the year ahead.   CSR is making changes to its operating footprint and overheads to mitigate the impact on earnings.    Longer-term, demand for CSR’s building products will be supported by housing activity driven by population growth, high employment and a stable environment for interest rates.  
Property – Whilst the quantum of earnings may fluctuate due to the timing of transactions, the ongoing development of a number of major projects will underpin Property earnings over the next 10 years.
Aluminium – Currently 71% of net aluminium exposure for YEM20 is hedged at an average price of A$2,718 per tonne (excluding ingot premiums) as of 30 April 2019.  

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