The James Hardie Industries plc (ASX: JHX) share price is up 13% after the building products business revealed its second-quarter performance.
James Hardie share price
James Hardie Q2 trading update
For the three months to September 2023, the business revealed another strong period of performance.
Net sales rose slightly to $998.8 million, adjusted EBITDA (EBITDA explained) rose by 9% to $285.5 million and adjusted EBIT increased 10% to $240 million. Adjusted net income (net profit) increased 2% to $178.9 million and net income fell 9% to $151.7 million.
For the six months to September 2023, operating cash flow jumped 74% to $459.1 million.
James Hardie’s CEO Aaron Erter said that this quarterly update was a proof point that it was “accelerating through this circle and taking share”.
The North American fiber cement segment saw net sales decrease 2% to US$734.4 million, after average net sales price growth of 2% offset by a 5% decline in volume. EBIT increased 9% to US$232.7 million.
Asia Pacific fiber cement saw net sales increase 7% to A$225.1 million, and there was an average net sales price growth of 15% and a 9% decline in volumes, with Australia being the strongest region. EBIT increased by 21% to A$67.9 million.
The Europe building products segment delivered a 5% increase in net sales, largely due to a 20% increase in the average net sales price, though volumes declined 15%. EBIT increased by 161% to €11.5 million.
Guidance for FY24
James Hardie said that the outlook for the housing markets it participates in globally “continues to remain uncertain”. In its largest market, North America, the external data providers the ASX share utilises expects its addressable market to decrease between 7% and 13% in calendar year 2023 compared to 2022.
In the third quarter of FY24, North American volumes are expected to be in the range of between 730 million to 760 million standard feet. The North American EBIT margin is expected to be in the range of between 30% to 32%. Adjusted net income is projected to be between to US$165 million to US$185 million.
It also said that for the full 2024 financial year, it expects to spend a total of approximately US$550 million in capital expenditures.
I can see why the James Hardie share price has reacted to the ongoing strength of its performance. But, I’d be cautious about buying shares now after the rise because it’s still possible things could go downhill from here.
