Boral Returns To Profit, Buys Lafarge's JV Stake For EUR380 Million

Boral Ltd. (BLD.AU) said Wednesday it would buy Lafarge S.A.'s (LFRGY) 50% stake in their Gypsum Asia joint venture for EUR380 million after the Australian building company returned to profit in its latest full year.

Lafarge Boral Gypsum Asia is a plasterboard business that includes manufacturing operations in 20 countries. The enterprise value of the acquisition, which includes debt, is EUR429 million, Boral said.

Boral swung to a net profit of A$167.7 million in the year ended June 30, from a loss of A$90.5 million in the previous year, in line with expectations. Forecasts for 2010-11 net profit among five brokerages ranged between a Goldman Sachs estimate of A$164.2 million and one by RBS at A$177.6 million for an average A$169.6 million.

Chief Executive Mark Selway said revenues rose in 2010-11 with a strong first half in Australian building products operations helping offset tougher trading in the U.S., the impact of wet weather in eastern Australia, and flooding in Queensland, and a softening of residential building in Australia.

"Current conditions make it difficult to accurately predict the outcome for FY2012," given the residential new build market in Australia weakened considerably in the second half of FY2011, Selway said in a statement.

With the exception of construction materials and cement, where pricing and project work are forecast to deliver first half growth, Boral expects a continuation of slower economic activity in residential housing in Australia, he said.

Profit from continuing operations of A$163.5 million last fiscal year was within the A$160 million-A$175 million guidance range provided by the company in May.

The 2010-11 profit was built on a 2.4% on year rise in revenue to A$4.71 billion from A$4.60 billion previously. The company declared a final dividend of 7.0 cents to take total 2010-11 dividends to 14.5 cents from 13.5 cents previously.

By Ray Brindal, Dow Jones Newswires; 612 62080902; [e-mail]