Boral is now a nationally focused company in Australia after being sold outside of North America in a series of asset sales of more than $4 billion. Boral’s president, Ryan Stokes, son of Rich Lister Kerry Stokes, has been a big driver of the North American exit.
A savage program of company-wide job cuts resulted in the departure of 220 people in June, July and August, generating $35 million in annualized savings. Boral brought PwC under a program called Project Next to cut positions.
Power costs and higher fuel costs totaled an additional $58 million in 2021-22. Todorcevski said diesel prices rose 90 percent last year.
He said rising interest rates and the knock-on effect in the housing market were causing some potential buyers to reconsider whether an apartment was a better option compared to a single-family home.
Results ‘mostly positive’
“Now it’s making apartments much more affordable,” he said.
Boral’s earnings before interest and taxes fell by 32 percent to $107 million for 2021-22 and were in the range previously forecast in May for EBIT of between $100 million and $110 million when the group lowered earnings for the second time. .
Ending net income soared to $961 million due to one-time proceeds from North American asset sales. Total revenue increased 1 percent to $2.95 billion.
Barrenjoey analyst Brook Campbell-Crawford said Boral’s full-year results were “mostly positive,” with price increases and other efficiency programs likely to more than offset cost inflation in 2022-23. .
It was the final set of financial results delivered by Todorcevski, who has been CEO since July 2020.
He will depart in December when Vik Bansal takes over in a reshuffle brought about by Ryan Stokes.
Mr. Bansal is currently CEO of the Australian steel group InfraBuild, part of the global GFG Alliance, owned by British billionaire Sanjeev Gupta.
Todorcevski said there was no change to his official departure date of December 5, when Bansal would arrive. There are periodic transitions to catch up, before the change.
“We’re talking about substance,” Todorcevski said.
While Boral is trying to do everything in its control to reduce costs, the prospect of wetter weather creates uncertainty. Heavy rain in Sydney meant it was the wettest July on record.
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