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CSR Shares Plunge to Eight-Year Low on Profit Decline Forecast

Post Time:Feb 19,2009Classify:Company NewsView:309

CSR Ltd., Australia’s second- largest maker of building products, fell to the lowest in almost eight years in Sydney trading after the company said profit may fall as much as 35 percent on worsening demand.

The stock plunged 18 percent to A$1.23 on the Australian stock exchange at 11:39 a.m. local time. That’s the Sydney- based company’s lowest since March, 2001.

Demand for CSR’s products including glass, insulation and plaster board shrunk as Australian housing approvals fell to an eight-year low. At the same time, aluminum prices dropped 30 percent in the last three months, trimming profits from making the lightweight metal.

“In the past three months, the Australian and New Zealand residential and non-residential construction markets have declined more quickly and further than previously anticipated,” CSR said today in a statement. “In the same period the price of aluminum has also dropped very sharply.”

Profit before one-time items is expected to be between A$125 million ($79.4 million) and A$140 million in the 12 months ending March 31, the company said in the statement. That compares with A$192.8 million a year earlier.

An improvement in residential construction demand isn’t expected until “well into” the company’s next fiscal year, while non-residential construction demand isn’t likely to recover “significantly” in that period, CSR said.

The company is scheduled to release its profit on May 13.

Source: BloombergAuthor: shangyi

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