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Adelaide Brighton Limited (ASX:ABC) has flagged potential changes to a South Australian cement supply deal which could potentially chip into its profits.
The company has warned one of its customers has proposed constructing facilities in Adelaide which would allow it to supply its own cement in the state.
Adelaide Brighton says the customer now buys about 120,000 tonnes of cement in SA. If the company were to lose the volume from January 1, 2016 Adelaide Brighton expects its profit before tax in 2016 could drop by $15 million.
Adelaide Brighton has advised negotiations have been progressing with the customer for supply beyond 2014.
At this stage Adelaide Brighton remains the sole manufacturer of clinker in South Australia.
Adelaide Brighton reported a net profit of $151 million in the full 2013 calendar year.
