Boral has announced it expects to recognise a non-cash, pre-tax impairment charge of $1.3 billion in its financial results, which will be released to market on Friday August 28.
The vast majority, $1.2 billion of the non-cash impairment charges relate to Boral’s North American assets such as goodwill, intangible assets and the company’s investment in the Meridian Brick joint venture.
Its carrying value assessment took into account uncertainty caused by COVID-19 and the recent operating performance of the business.
Of the total $1.3 billion, $123 million is in relation to Boral Australia, this includes assets in Australian building products and Western Region construction materials businesses.
Boral recognised, in its carrying value assessment, a decline in housing construction particularly in NSW, slower pace of infrastructure construction than previously expected and low levels of construction activity in WA and the NT. It also noted the impact of recent bushfires on it’s timber business and uncertainty around the COVID-19 recovery.
The company expects to report an EBITDA of around $820-825 million and a net profit after tax but before significant items of around $170-180 million for FY20. It will not pay a final dividend for FY20, citing significant uncertainty in the economic outlook.
Boral took on a new CEO, Zlatko Todorcevski in July this year and are in the process of a Board renewal.
New CEO and Managing Director, Zlatko Todorcevski said we are operating in a time of considerable uncertainty concerning the impact of COVID-19 on the economies and markets in which we operate, both in the shorter and longer term.
“This uncertainty together with recognition of Boral’s current and historical business performance, have been critical factors that we considered in assessing the recoverable value of our assets at this time,” he said.
“Despite Boral’s challenges and the difficult operating environment, I am excited by the opportunities ahead of us. I am looking forward to providing my initial impressions of the company when we present the details of Boral’s full year results on August 28, and then presenting the outcomes of the portfolio review towards the end of October at around the time of our AGM.”
We know many people are working remotely, for a free home subscription to Roads & Infrastructure click here.
Related stories:
- Boral aims to preserve cash supply in COVID-19 market update
- Transurban annual results impacted by COVID-19 traffic reduction
- Boral uses four recycled materials in Perth street