Brickworks’ sales hit by virus downturn

Building products manufacturer Brickworks says sales revenue in its main Australian market has dropped 10 per cent in the four months to the end of May as a result of the coronavirus pandemic.

Sales revenue in its other major market, the US, was up 26 per cent from a year ago in the same period but this was mainly due to acquisitions made in the past year.

However, sales volumes in North America in April and May were down more than 30 per cent from pre-COVID-19 levels.

Brickworks had flagged an early impact of the virus in late March when it reported its first-half results and had forecast significant disruption and reduced demand for the the remainder of the current financial year.

While overall contribution from the US so far this year remains positive, the coronavirus has resulted in negative earnings in recent months, chief executive Lindsay Partridge said in a presentation on Tuesday.

Margins remained positive in Australia, he said.

Brickworks has reduced production to control stock levels during the slowdown and has cut 200 jobs — or 10 per cent of its workforce — since the start of 2020. All non-critical capital expenditure has also been deferred indefinitely.

In addition, it has closed the Bigler plant in the US and converted the York plant to one kiln.

“We are re assured by the response of governments in Australia and the United States both have indicated that construction is integral to the post COVID-19 recovery,” Mr Partridge said.

COVID 19 has had no material impact on the company’s property trust rental income.

Brickworks shares were up one per cent to $15.79 at 8.40am in a weak Australian market.

AAP