Boral in earnings raincheck

Building materials company Boral has shed $45 million off forecasted underlying earnings on account of heavy rainfall and ballooning fuel prices.

While it did not provide a finite figure, the Sydney-based business indicated that it was likely to fall some $45 million short of the $145 million to $155 million earnings guidance range it had previously flagged in March.

That guidance was based on the assumption that there would be no further “extraordinary rain events” for Boral, which had created logistical issues in delivering products to New South Wales and Queensland earlier in the year.

Weather-related issues and creeping energy prices have continued however, with Boral expecting fallout from continued rainfall through May thus far to the tune of $30 million, while allowing $15 million for inflationary impacts and higher energy costs.

Its ‘transformation program’ is also set to fall short of expectations, downgraded from a $60 million to $75 million targeted range to $45 million to $50 million.

Boral implemented product price increases earlier this year in a bid to mitigate forecasted issues, but it said they had been “insufficient” in offsetting the impact of more recent increases in energy prices.

Boral chief executive Zlatko Todorcevski said the business was accelerating its focus on costs.

“We are responding to this challenging operating environment by implementing additional measures to mitigate the impact of transport and fuel inflation alongside the already announced out of cycle price increases, and accelerating our focus on costs,” Mr Todorcevski said in a statement.

Boral shares were off 3.3 per cent to trade at $3.10.