With earnings being impacted by challenging external conditions, Boral has recorded financial year (FY) 2022 results that are in line with revised earnings guidance of $107 million, that were announced on 18 May 2022.
Taking into consideration the factor of heightened heightened inflation, Boral delivered cost reductions through measures of simplified corporate organisational structure and a change to property management strategy and operating footprint.
Speaking on the unique challenges faced by the company this year chief operating oficer and managing director of Boral, Zlatko Todorcevski, supported the changes to be made to ensure that Boral is able to adapt to changing weather and environmental conditions.
“Boral’s revenue benefited from stronger infrastructure and residential activity,” Todorcevski said.
“However, industry-wide construction lockdowns and exceptional rainfall, particularly in NSW and Queensland, curtailed volumes and significantly impacted margins. In addition to reducing operating efficiency, these events resulted in additional operating and repair costs.”
“We’ve taken a number of actions to respond to the challenges. These include implementing pricing initiatives, accelerating overhead cost reductions through a simplified corporate organisational structure that will create a more agile and efficient organisation, and taking steps to mitigate our energy cost exposure.”
Looking to the future, the company has also shared the outlook for FY 2023 with a number of milestones that include:
- Revenue to be higher than FY2022, driven by strong price growth and increased volumes, with volumes to benefit from less disruption, including no construction shutdowns and higher construction demand,
- stronger infrastructure demand, including accelerating major projects work, and improved non-residential activity to more than offset softening detached housing demand in 2H FY2023,
- a high risk of further adverse impacts due to exceptional rainfall, with July 2022 the wettest July on record in Sydney, and;
- the benefit of price increases coupled with performance improvement initiatives to more than offset the impact of significant total cost inflation, with energy costs remaining elevated.
The company maintains a strong stance on sustainability and prioritising health and safety, heading into FY23.
“A key priority remains safety, where we acknowledge we have further work to improve our performance,” Todorcevski said.
“This will be a renewed focus in FY2023, including implementing a refreshed approach that incorporates more visible leadership.”