Construction materials manufacturer Boral has delighted investors with bumper profits in its first reporting period under new CEO Vik Bansal.
Boral's share price shot up 11 per cent by noon on Wednesday after the company reported net profit after tax rose 53 per cent to $57 million for the six months to December 31.
Mr Bansal, who joined Boral in June after leaving waste management company Cleanaway under a cloud of bullying allegations, said he was pleased with the strong results even as high inflation ratcheted up the cost of materials in the sector.
Higher prices, he said, as well as growth in sales and cost discipline were behind the 23 per cent increase in earnings before interest and tax (EBIT) to $95m.
The figures represent a solid result for the group despite a challenging cost environment, said Moody's Investors Service vice president Saranga Ranasinghe.
With strong liquidity and disciplined cost management, Ms Ranasinghe expected Boral to continue benefiting from a strong pipeline of planned infrastructure projects over the next 18 months.
"However, risks exist given our expectation of continued inflation and project delays amid weakness in the construction market, labour shortages and increasing project complexity," she said.
Since becoming CEO, Mr Bansal has overseen a flattening of Boral's organisational structure, giving regional concrete plants and quarries greater management of day-to-day operations and proximity to customers.
Investors are liking what they are seeing of Mr Bansal's tenure already, with share prices up 37 per cent since he took over.
Despite the strong results, Boral opted not to pay shareholders an interim dividend, citing a limited availability of franking credits and free cashflow performance.
The company said it expects earnings for the second half of the financial year to be broadly in line with first half results.
