James Hardie boss says house price gains will drive renovation rebound
James Hardie has managed to increase the price of building materials sold in Australia by 15 per cent, bolstering profits despite the company’s chief executive describing the market as “unsettled”.
Aaron Erter, who has been at the helm of the plasterboard and wall cladding company for a year, said he expects renovation work to rebound late next year as homeowners adjust to higher levels of interest rates.
“It’s like a beach ball underwater,” Mr Erter said after James Hardie reported a 2 per cent rise in net profits to $US178.9 million ($278 million) for the three months to the end of September. “People have more wealth in their homes than they’ve ever had.”
Aaron Erter took the helm at James Hardie in September 2022.
James Hardie shares jumped 12 per cent in early trading on Wednesday to above $46 following the results. Mr Erter said the company was gaining market share with its wall cladding and plasterboard products. Net profit for the six months ended September was down 6 per cent to $US309.5 million.
The Reserve Bank lifted interest rates on Tuesday for the 13th time since the first increase last year. CSR, a rival building products group, last week said there was a solid pipeline of house construction that runs until June, and any lift in interest rates would be absorbed without hurting demand because of the strong migration levels and low unemployment.
James Hardie makes about two thirds of its profits in North America. Mr Erter said there would be a short-term downturn in the North American housing market of between 7 per cent and 14 per cent.
James Hardie lifted prices by 15 per cent in its Asia-Pacific business, of which the Australian operations are the core, in the September quarter, compared with the same
Read more on afr.com
