Brickworks anticipates reporting a $55 million impairment charge in its upcoming half-year results, primarily due to a revenue decline in its North American operations. The building product manufacturer attributes this downturn to intense competition within the retail sector, challenging overall market conditions, and necessary plant shutdowns implemented to manage inventory levels. These factors collectively contributed to a 13% reduction in revenue during the first half of the year.
The plant shutdowns, while intended to control inventory, had the adverse effect of driving unit manufacturing costs higher. This increase in costs, coupled with the revenue decrease, led to a significant decline in earnings for the period. Brickworks noted that the North American building products earnings will be substantially lower due to these factors, further exacerbated by unusually severe winter weather in key regions during the latter part of the reporting period. The company has not yet provided a revised earnings forecast to reflect these challenges.
