(Reuters) – James Hardie Industries PLC (JHX.AX), the world’s top fiber cement building materials maker, posted a 17 percent rise in annual adjusted net operating profit, helped by higher unit prices and an uptick in house construction in the key U.S. market.
The profit figure for the year ended March 31 came in at $291.3 million, compared with $248.6 million a year ago, the company said on Tuesday.
Net sales grew about 7 percent to $2.05 billion, helped by a 5 percent rise in unit prices in the North American fiber cement business. New U.S. single-family homes sales in the Western part of the United States surged to their highest level in more than 11 years in March.
James Hardie said that it expects its crucial North America fiber cement segment’s earnings before interest and tax margin for fiscal year 2019 to be in the top end of its 20 percent to 25 percent target range.
The North American market accounted for about 76.8 percent of the firm’s net sales for the year, with the price of its ASX-listed shares reflecting a relationship with the U.S. dollar’s strength.
“The guidance that the company has given on new construction starts in the United States is very, very solid…the exchange rate obviously helps them,” said James McGlew, executive director for corporate stockbroking at Perth-based Argonaut.
James Hardie said it expects U.S. new construction starts of between about 1.2 million and 1.3 million in fiscal year 2019.
Net profit attributable for the year was weighed down by an actuarial adjustment which raised the assumption for the base level of mesothelioma claims for 2018/19.
It fell 47.2 percent to $146.1 million largely due to the provisioning change for the claims for the asbestos-caused cancer.
“Asbestos adjustments for the quarter and full year primarily reflect the unfavorable movement in the actuarial adjustment of US$195.8 million recorded at year end,” James Hardie said in a statement.
The firm, which has a manufacturing presence in the United States, Australia, New Zealand and the Philippines, completed the purchase of German holding company of fiber gypsum board maker Fermacell GmbH from Xella International SA in April.
The deal, worth 473 million euros ($557.62 million), was seen as a move by James Hardie to diversify both its geographic exposure and product mix.
The firm declared on Tuesday a second half ordinary dividend of 30 U.S. cents per security.
ASX listed-James Hardie shares were up 4.1 percent at 0200 GMT, in contrast to the Australian benchmark S&P/ASX 200 Index , which was 0.8 percent lower.
Reporting by Aaron Saldanha in Bengaluru; Editing by Cynthia Osterman and Muralikumar Anantharaman