The James Hardie (ASX: JHX) share price is up 6% after announcing its half year result.
James Hardie is an industrial building materials company headquartered in Ireland that was founded in 1888. It manufactures fibre cement building products for external cladding, interior lining, flooring and eaves.
James Hardie’s Half Year Result
The building materials business announced that its net sales from ordinary activities rose by 2% to US$1.3 billion.
North American Fiber Cement saw volume increase by 4% for the half year and that segment saw its EBIT margin (click here to learn what EBIT means) improve to 27.1%, up from 26.1%.
Looking at profitability in the other regions, Asia Pacific Fiber Cement saw its EBIT margin increase to 24% from 23.5%. However, the Europe Building Products EBIT margin fell to 9.9% from 10.3%.
The total ‘adjusted’ EBIT rose by 21% to US$258.6 million and it rose by 26% to US$134.2 million in the second quarter.
Adjusted net operating profit of US$98.6 million for the quarter and US$188.8 million for the half year was an increase of 22% and 17% respectively. Net profit attributable to shareholders for the half year was up 18% to US$189.6 million.
James Hardie CEO Dr Jack Truong said: “We are pleased with our second quarter performance, delivering net sales and EBIT growth in local currency in all three regions: North America, Asia Pacific and Europe. It reflects our team’s continued good execution of our global strategic plan.
“We remain on-track to deliver full year EBIT margin accretion for fiscal year 2020.”
In the US housing market in the 2020 financial year the company expects new construction starts of between 1.2 million to 1.3 million. The North America Fiber Cement EBIT margin is expected to come in between 25% to 27%.
James Hardie management expect full year adjusted net operating profit to be between US$340 million to US$370 million assuming similar conditions, costs and so on. This guidance excludes the impact of actuarial estimates on asbestos-related assets and liabilities in future periods.
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