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UPDATE 1-Australia's Adelaide Brighton flags lower FY earnings on soft construction market

Published 31/07/2019, 10:30 am
Updated 31/07/2019, 10:40 am
© Reuters.  UPDATE 1-Australia's Adelaide Brighton flags lower FY earnings on soft construction market

(Adds impairment charge, background, share move)

July 31 (Reuters) - Australian cement manufacturer Adelaide Brighton Ltd ABC.AX on Wednesday flagged weaker annual earnings and scrapped its interim dividend, citing further softening of conditions in the residential and civil construction markets.

The company's stock plunged as much as 19% in early trade to notch its biggest intraday percentage drop since May 2004, against a broader benchmark .AXJO which traded marginally lower.

The move underlines troubles plaguing many companies in the construction and housing sector amid a sharp downturn in Australia's property market that has crimped consumer spending.

The company expects underlying NPAT, excluding property, of A$120 million ($82.5 million) to A$130 million for the year ended Dec. 31, adding that it would not declare an interim dividend for the period ending June 30.

Apart from softer construction conditions, it said continued competitive pressure in Queensland and South Australia, and an increase in raw material and shipping costs associated with softening volumes in Victoria, had also impacted on its outlook.

The Adelaide-headquartered company said it would record a non-cash impairment of no more than A$100 million pre-tax for the six months ended June 30, but the write down would not impact underlying profit.

In May, Adelaide Brighton had already slashed the full-year underlying NPAT figure, expecting it to be about 10% to 15% lower than the previous year's A$190.1 million.

($1 = 1.4550 Australian dollars)

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