May 16, 2012 – 9:44AM
Building products group CSR fears Australia’s housing construction industry will remain in the doldrums in the year ahead.
The company made the comments on Wednesday as it announced its net profit fell to $76.3 million in the year to March 31 from $503.4 million the previous year.
Trading revenue fell to $1.8 billion from $1.9 billion.
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CSR estimated total housing starts in Australia would fall to about 140,000 in the year to March 2013, down from the 148,300 in 2012.
“Excluding the global financial crisis and the introduction of the GST, this represents the lowest level of housing activity in the past 15 years,” CSR said in a statement.
CSR said it expects total private detached commencements to remain steady around 90,000, with multi-residential starts expected to fall by about 10 per cent to 50,000.
However things should be better across the Tasman, with dwelling starts in New Zealand expected to improve by about 15-20 per cent for the year, albeit from a low base.
‘‘CSR expects the market for housing alterations and additions to improve slightly and anticipates that the value of non-residential construction work done in Australia will be steady on the previous year,’’ the company said.
CSR also expects its building products and Viridian businesses, to benefit from the restructuring implemented over the past year.
However its GAF aluminium business is likely to be affected by foreign currency movements.Lower spot aluminium prices in US dollars combined with the high Australian dollar mean the business has begun the year with a significantly lower net hedged position than previous years.
CSR said GAF has about 14 per cent of its net aluminium exposure hedged at $3,077 a tonne compared to about $2,010 a tonne at April 30, 2012.
‘‘GAF will add hedging as metal and currency markets permit, however, given the current net hedged position, earnings for YEM13 (year ending March 2013) will be more exposed to the A$ spot price of aluminium than in previous years,’’ CSR said.