(Reuters) - Australian cement maker Adelaide Brighton <ABC.AX> posted a 35% drop in half-year profit on Wednesday, hurt by weakness in the construction sector, higher raw material costs and competitive pressure.
The company last month downgraded its annual earnings guidance to A$120 million to A$130 million - about 37% below 2018's figure of A$190.1 million, prompting it to forgo an interim dividend.
Earlier this week, the country's largest building materials maker Boral Ltd <BLD.AX> reported a 7% fall in 2019 underlying profit due to a housing construction slump and warned of an even bigger profit decline this year.
Adelaide Brighton said that while residential construction is forecast to continue to decline until 2021, it expected higher demand for construction materials from the mining and infrastructure sector.
The company added that it would target cost savings of A$10 million in fiscal 2020.
Underlying net profit after tax was A$55.3 million ($37.4 million) for the six months to June 30, compared with A$85.2 million a year ago.
Australian home prices have been falling for nearly two years, but recent signs of stabilisation in major cities like Sydney and Melbourne may prove to be a blessing for the construction sector.
(Reporting by Shriya Ramakrishnan in Bengaluru; editing by Richard Pullin)
