Boral (ASX:BLD) says its earnings have been impacted by lower sales volumes due to the recent rainfalls in NSW and Queensland, and sharp increases in fuel and coal prices.
The building material company now expects underlying earnings before interest and tax for its continuing operations (excluding property) in financial year 2022 to be between $145 million and $155 million, assuming no further extraordinary rain events.
“The impact on sales volumes of the extreme rainfall across New South Wales and Queensland in late February and early March have adversely impacted Boral’s earnings by $23 million,” said chief executive officer Zlatko Todorcevski.
“In addition, unusually extreme and rapid increases in the price of coal and diesel have recently occurred. This cost escalation is not expected to be recovered by our January and February product price increases, with the future cost impact based on current forward prices.”
Boral said its exposure to coal prices are unhedged for the the second half of FY22, while hedging is in place for most of its expected diesel usage to April 2022, with no hedging thereafter.
It also said elevated fuel prices are exacerbating supply chain constraints which are expected to continue impacting the second half.
Shares in Boral (ASX:BLD) are trading 3.5 per cent lower at $3.33.