Shares of Brickworks tumbled nearly 10% in early trading today, falling to $23.20, after the construction materials company warned of a $55 million non-cash impairment and lower earnings from its North American operations. The company cited challenging market conditions, including heightened competition and weaker demand, which have led to plant shutdowns and a 13% decline in first-half revenue for the division.
Lower Earnings and Non-Cash Impairment
Brickworks announced it will recognize a post-tax non-cash impairment charge of $55 million for its North American business in its upcoming first-half financial results. The company also warned that earnings from its Building Products North America division would be significantly lower, while earnings from Building Products Australia are expected to remain stable compared to the previous year. Property earnings, however, are set to increase, while investment earnings are yet to be finalized.
Market Challenges Weigh on Performance
The impairment follows a reassessment of asset values as of January 31, with Brickworks attributing the decline to ongoing market difficulties in North America. A highly competitive retail landscape has resulted in market share losses across its store network, while lower demand has forced production slowdowns to manage inventory. Weak building activity and reduced output are also delaying anticipated benefits from recent plant upgrades and consolidations.
Despite these headwinds, the company remains focused on managing costs and optimizing operations to navigate the current economic climate. Brickworks’ full first-half results are expected later this month, offering further insights into the financial impact of these challenges.
Related Topics:
Campaspe Murray Hosts Business Connect Event
A Stronger Future for Franchisees: Policy Progress and Industry Recognition
Government Expands Dispute Resolution Service for Small Business
