JHX released H1 report today. Excluding asbestos, ASIC expenses and tax adjustments, EBIT down, net operating profit down. (including the above items things look even worse). Quarter by quarter thing look worse: sales down 5% compared to PCP and down more than 10% in quarter 2 compared to quater 1. The increase in the $A is having a maasive impact on JHX's Australian liabilites which includes $A345 million for taxes, penalties and interest related to 1999 tax. The company provides full year profit guidance in the lower range of $110-125 million (range already provided earlier this year assuming among other things (which they dont identify) a relatively unchanged exchange rate. Difficult to see how this will be achieved given Q2 operating profit was only $20 million and trend quarter by quarter is going down. The company even admits the outlook for house building in US and Europe is bleak and that building input prices are going up. Seems likely to me that JHX will continue its usual form of not fully informing the market of real outlook till earnings downgrade becomes inevitable.
JHX Price at posting:
$5.65 Sentiment: Sell Disclosure: Held
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