At the time of writing, the James Hardie Industries plc (ASX: JHX) share price is up by 5.77% to $31.90 after the company released its quarterly results to 30 June 2020.
What was in the announcement?
According to James Hardie, net sales from ordinary activities were down 5% on the prior corresponding period to US$626.3 million. Net profit after tax was down 89% versus the June quarter of 2019 to US$9.4 million. This came as the company recorded restructuring expenses of $11.1 million and asbestos adjustments of $63.7 million. Operating cash flow was $189.2 million, an increase of 35% on the prior corresponding period.
James Hardie’s earnings before interest and tax for the quarter were US$124.9 million, which was flat compared to the June quarter of 2019. The company also announced adjusted net operating profit of US$89.3 million which was in line with the prior corresponding period.
James Hardie CEO, Dr Jack Truong, commented on the result:
In February 2019 we launched a global strategy to transform James Hardie from a big, small company to a small, big company that is capable of delivering growth above market with strong returns, consistently. This is now our fifth consecutive quarter of delivering strong results in-line with the core goal of that strategy: growth above market and strong returns. I am very pleased to note that not only do we remain on-track with our transformation, but we are also accelerating our transformation during the pandemic.
During the first quarter we strengthened our liquidity and financial flexibility, delivering US$189.2 million of operating cash flow, an increase of 35% versus the prior corresponding period. This outstanding cash performance was driven by our strong, profitable sales and significant improvement in our working capital. We increased our liquidity to US$693.1 million and lowered our leverage ratio to 1.65x. We expect to continue to improve liquidity and the robust execution of our strategic plan during the pandemic.
Dr Truong also admitted that the coronavirus had interrupted markets in which James Hardie operated and had created uncertainty in economies and housing markets. Despite this, he expects adjusted net operating profit after tax to be between US$330 million and US$390 million.
About the James Hardie share price
James Hardie is a global building materials company and is the world’s largest manufacturer of fibre cement products. It is listed on both the New York Stock Exchange and the ASX.
In May, James Hardie suspended its dividend until further notice in order to strengthen the company’s liquidity and to manage market volatility.
The James Hardie share price is up 154% since its 52-week low of $12.54 and has returned 14.45% since the beginning of the year. The James Hardie share price is up 43.23% since this time last year.
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Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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