Hills books first half loss of $73.6m
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MELBOURNE, Feb 11 AAP
February 11 2013, 1:33PM
Electronics, building materials and lifestyle products supplier Hills Industries says trading conditions are still challenging, and it can't provide specific guidance on its outlook for the full financial year at this time.
Hills on Monday booked a net loss of $73.6 million for the six months to the end of December 2012, compared to net profit of $15 million in the prior corresponding period.
The bottom-line result included $81.8 million in impairment, restructure and closure costs, after tax.
Hills said the result was in line with guidance provided to the market at the company's annual general meeting in November 2012.
At 1318 AEDT, shares in Hills were 12.5 cents, or 11.36 per cent, lower at 97.5 cents.
Hills said current trading conditions were forecast to remain challenging in many of the group's markets in Australia and New Zealand.
The immediate outlook for the group's steel assets remained subdued due to slower commercial building activity and continuing competition from imports.
But these businesses were being restructured to take advantage of the expected uplift in macroeconomic activity.
Hills was cautiously optimistic about future activity across its electronics and communications division once spending on capital projects by the corporate and public sector resumes.
"In view of the above, the Hills is unable to give specific profit guidance for the 2012-2013 full year at this time," Hills chief executive Ted Pretty said in a statement.
"However, the company broadly expects its second half NPAT (net profit after tax) result, which will include the benefit of expected cost savings in labour, rent and depreciation, to be higher than the first half."
Hills said it would take $4.5 million in further one-off impairment and restructuring charges in the second half of the current financial year.
Hills will provide a market update of its performance and restructuring program on March 27.
Mr Pretty said the restructuring of the group's activities and a focus on working capital, cash and costs would deliver long-term value to shareholders.
Most of Hills' business units had performed reasonably given the subdued conditions.
But deteriorating demand in commercial and residential building and home improvement continued to affect Hills' building and industrial products business and its lifestyle and sustainability business.
Hills did not pay an interim dividend.