Boral Affected by Housing Collapse

Boral has been affected the housing construction collapse. This has forced the company to lay off workers, particularly in the building products division. Its final dividend has also been slashed in half.

Boral’s underlying earnings fell to $199.6 million, a decrease of 28 percent. According to Boral, the decline is because of weak activity in commercial and domestic residential construction.

Data showed that houses being built in the country have dropped to about 112,000 annually. Last year’s figure was at 157,500 while 2010’s data was at 165,600.

According to Ross Batstone, about 950 people would be given the pink slip because of the market and earnings decline. This comprises about quarter of the building products division. Batstone is Boral’s interim chief executive.

Batstone said that job cuts are never a positive thing but the company has been greatly affected by the market decline. He added that it’s always painful to see valuable people leave the company.

The company posted a net profit of about $176.6 million. Batstone said the number is lower than what was originally expected because of a number of factors, which include a property sale that did not push through.

Boral initially expected about $175 million full-year net profit.