In key news on Australian stocks, Brickworks Limited’s (AU:BKW) share price was hit hard after the company reported a loss in its half-year results for FY24. The manufacturer posted a 115% decrease in statutory net profit after tax (NPAT), resulting in a loss of $52 million compared to a profit of $354 million a year ago. BKW shares were down 2.8% as of writing.
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Brickworks is a manufacturing company that specializes in building products for both residential and commercial markets. Additionally, the company operates in the property and investment segments.
Property Segment: A Drag on Results
Brickworks’ losses were triggered by the weaker performance of its property sales and non-cash property devaluations of AU$233 million. As a result, the property segment posted an EBIT (earnings before interest and taxes) loss of AU$178 million compared to a profit of AU$453 million in the first half of FY23. The changes in capitalization rates, higher interest rates, and stringent credit conditions led to a change in the external valuation methods, resulting in a revaluation of properties.
Brickworks reported a 6% decrease in revenue to AU$547 million. Among its segments, Australian building products revenue decreased by 11%, while building products revenue in North America increased slightly. Moreover, building products in North America delivered a significant 43% increase in EBITDA, reaching nearly $21 million. The growth in this segment is mainly attributed to improved prices, a reduction in inflationary pressures, and efficient utilization of plant resources.
The losses did not hinder Brickworks’ commitment to its shareholders. It raised its interim dividend by 4.35% to AU$0.24 per share, marking the 10th consecutive year of increase. The dividend will be paid on May 1, 2024, to the shareholders registered as of April 10.
Is Brickworks a Buy or Sell?
According to TipRanks consensus, BKW stock has received a Hold rating, backed by a total of three recommendations. The Brickworks share price forecast stands at AU$30.45, which shows a favorable change of 7% in the shares.
