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Highlights

  • Stock Rises: Brickworks shares climb 2% to AU$24.42 after half-year results announcement.
  • Mixed Financial Performance: Revenue drops 6% to AU$516 million, but underlying EBITDA surges 472% to AU$148 million, driven by a Property segment turnaround.
  • Dividend Growth Continues: Interim dividend increases by 4% to 25 cents per share, despite a challenging outlook.

Brickworks Ltd (ASX:BKW) shares edged 2% higher on Thursday, trading at $24.42, following the release of the company’s half-year results. Despite a drop in revenue, investors reacted positively to a sharp increase in earnings, fueled by a turnaround in its Property business.

Financial Performance Overview

For the six months ending 31 January 2025, Brickworks reported total revenue of AU$516 million, reflecting a 6% decline amid tough trading conditions across all business segments. However, underlying EBITDA soared 472% to AU$148 million, primarily due to a significant recovery in the Property division.

The Property segment rebounded from an EBITDA loss of AU$178 million in the prior year to an AU$38 million profit, offsetting weaknesses in its other segments. Building Products Australia saw a 4% drop in EBITDA to AU$50 million, while Building Products North America posted an AU$3 million loss, marking a 115% decline.

Excluding property revaluations from the previous year, Property EBITDA was actually down 32%, attributed to lower development profits as the Oakdale West Estate project neared completion and construction began at Oakdale East.

On the bottom line, statutory net profit after tax surged 141% to AU$21 million, reversing an AU$52 million loss from the prior year.

Dividend Increase and Market Reaction

Despite ongoing market challenges, Brickworks maintained its commitment to returning value to shareholders, increasing its interim dividend by 4% to 25 cents per share. The stock has faced a tough year, down 15% over the past 12 months, but investors responded positively to the earnings turnaround, pushing shares higher on results day.

Challenging Outlook for Second Half

Looking ahead, Brickworks CEO Mark Ellenor warned of ongoing headwinds in both Australia and North America.

“Demand for building materials in Australia is expected to remain at a cyclical low, with subdued sales activity expected to continue for the remainder of the current calendar year,” Ellenor stated.

In North America, persistent challenges due to high mortgage interest rates and affordability issues are expected to keep sales subdued for the rest of the year.