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Brickworks first-half profit drops 50%

Gus McCubbing
Brickworks MD Lindsay Partridge says the coronavirus is causing significant uncertainty

Brickworks' first-half statutory net profit has dived nearly 50 per cent on the back of a slowdown in building activity in Australia.

The Sydney-based building materials manufacturer reported statutory net profit of $58 million for the six months ended January 31, down 49 per cent from a year earlier.

It also saw its underlying NPAT drop 37 per cent to $100 million, while revenue grew one per cent to $449 million.

Brickworks chairman Robert Millner said the decline in earnings comes on the back of record underlying profit in the prior year period, and significant progress was made including an expansion into the United States.

This would provide the company with additional diversification and prospects for long-term growth.

He also flagged an uncertain outlook.

"Clearly, economic conditions have deteriorated significantly over the past few weeks, following the rapid escalation of the coronavirus pandemic," Mr Millner told the ASX on Thursday.

Brickworks managing director Lindsay Partridge said the company's America building products' arm was significantly impacted by the virus.

"Significant disruption is inevitable in the coming months," he told the ASX on Thursday.

"We are rapidly heading for a building downturn that will result in reduced demand for at least the remainder of the current financial year.

"Builders are reporting reduced activity at display homes and are imposing restrictions on the number of trades on site."

Mr Partridge also said the company's Australian building products arm saw its revenue drop 10 per cent to $338 million.

This followed a sharp slowdown in building activity across the nation, particularly multi-residential construction in NSW and Queensland.

"Prior to the coronavirus outbreak, key lead indicators were very positive, with building approvals trending up, and steadily increasing sales and orders for our products," Mr Partridge said.

"However, it is anticipated that the spread of the virus will cause a downturn in building activity over the next few months."

The company announced a fully-franked interim dividend of 20 cents per share, an increase of one cent, or five per cent, on the prior period.

Its shares were 70 cents, or 4.59 per cent, at $15.94 at 11.25 AEDT on Thursday.