Price rises and better-than-expected sales volumes in the huge US market saw the building products group James Hardie (ASX:JHX; NYSE:JHX) survive the uncertainty in parts of the global home building and construction sectors in the three months to 30th June. The company reported a modest 3% dip in net profit to $US157.8 million, off the back of a 5% drop in group revenue for the three months of $US954.3 million. This drop occurred as the company used price increases to offset volume weakness in the US, Australia, and Europe.
Global adjusted EBITDA hit a record $US279.1 million, according to Hardie's announcement to the ASX on Tuesday before trading opened for the day. The company said 'adjusted' net income rose 13% to $US174.5 million.
Sales in the key North American market fell despite a rise in price in the quarter. Hardie reported that net sales fell 6% to $US694.8 million, "on strong average net sales price (ASP) growth of +3%," but that was more than offset by a 9% fall in volumes in the quarter. However, Hardie stated that although sales volumes ended lower, they were better than the May update, and a "strong top line result, combined with significantly lower freight resulted in EBIT increasing 13% to a record $US217.6 million."
In the Asia Pacific markets, a fall in NZ sales volumes had a significant impact, but a sharp double-digit rise in prices offset the slide. Hardie said that net sales increased 5% to a record $209.7 million in the Asia Pacific region. ASP growth of +12% "was partially offset by an 8% decline in volumes, primarily in our New Zealand business." Despite these problems, Hardie said Asia Pacific EBIT jumped 35% to a record $A69.5 million.
In Europe, net sales fell 1% to €109.7 million. "ASP growth of +23% was offset by an 18% decline in volumes, driven by the slowdown in the housing markets we participate in," the company reported.
CEO Aaron Erter said, "Our team's focus remains simple: working safely, partnering with our customers, managing decisively, and controlling what we can control. This focus has enabled us to start the year strong, delivering our best-ever first-quarter results for both Adjusted Net Income and Operating Cash Flow."
Erter further stated, "I believe our last two quarterly results are proof points that we are accelerating through this cycle. We have a superior value proposition with the right products and solutions that help our customers grow profitably. Our team is focused on maintaining our momentum to deliver strong financial results again in the second quarter as highlighted by our guidance range provided today."
In fact, the company says adjusted net income is in the range of $US170 million to $190 million, slightly ahead of the $US175.8 million reported for the June 2022 quarter.
Hardie shares closed at $A40.76 on Monday, up more than 46% year to date.
