(Adds details on cut in guidance, CEO comment, background)
Aug 24 (Reuters) - Australia’s Boral Ltd on Monday slashed its earnings expectations for fiscal 2020, scrapped a final dividend payout and said it would book an impairment charge of A$1.35 billion ($967.14 million) on some underperforming assets.
The country’s largest building materials supplier is facing an uncertain outlook due to the coronavirus crisis, as new home building across the globe remains subdued and the spread of the virus continues unabated in most parts.
Boral is under added pressure after bushfires disrupted its operations in Australia earlier this year and an investigation found inflated earnings at its North American window-making business, which it had said it is still trying to recover from.
Excluding one-time items, Boral expects net profit after tax to be around A$175 million to A$180 million for the year, compared with the range of A$320 million to A$340 million it forecast in February this year. “We are operating in a time of considerable uncertainty concerning the impact of COVID-19 on the economies and markets in which we operate, both in the shorter and longer term,” Chief Executive Zlatko Todorcevski, who joined the company in July, said in a statement.
“This uncertainty, together with recognition of Boral’s current and historical business performance, have been critical factors that we considered in assessing the recoverable value of our assets,” he added.
The majority of the write down was on assets within its North America division and its investment in the Meridian Brick joint venture, reflecting its expectation of significant decline in housing construction in the near term.
The company also said it will not pay a final dividend. It expects to report full-year results on Aug. 28.
$1 = 1.3959 Australian dollars Reporting by A K Pranav and Rashmi Ashok in Bengaluru; Editing by Peter Cooney and Christopher Cushing
Our Standards: The Thomson Reuters Trust Principles.