James Hardie profit comes in at lower end of forecast range, shares slip

By Jaskiran Singh

(Reuters) -James Hardie Industries Plc said on Tuesday its annual profit jumped over a third buoyed by strong demand for its fiber cement products in the North American market, but still came in at the lower end of its forecast range, sending shares lower.

The world’s No. 1 maker of fibre cement products said its adjusted net income was $620.7 million for the year ended March 31, compared with its forecast range of $620 million-$630 million, which was hiked four times during fiscal 2022.

Annual net sales at James Hardie’s North American fibre cement segment rose 25% to $2.55 billion from a year earlier, the Dublin-based company added.

Demand for new homes in the United States, which accounts for James Hardie’s majority of revenue, grew last year as people flocked towards spacious, low-density accommodations helped by low lending rates and favourable market conditions.

“The North America business remains well positioned to deliver strong net sales and EBIT (earnings before interest and taxes) growth in fiscal year 2023,” said Sean Gadd, president of the North America division of James Hardie.

However, with the U.S. central bank raising interest rates to tackle growing inflation, the borrowing cost is also set to rise, resulting in a possible slowdown in the housing market.

James Hardie thus took a cautious stance, leaving its earlier adjusted net income forecast of $740 million to $820 million for fiscal 2023 unchanged.

“We acknowledge that increasing guidance in FY23 in the current interest rate environment may have seen little or no reward,” analysts at Jefferies wrote in a note.

James Hardie declared a second-half dividend of 30 cents per share.

Shares of the company, which have lost nearly a third in value so far this year, fell as much as 5.1% in early trade.

(Reporting by Jaskiran Singh and Indranil Sarkar in Bengaluru; Editing by Anil D’Silva, Amy Caren Daniel and Subhranshu Sahu)