“The risk for the energy generator is passed to us. If the coal coast goes up globally then that is passed on,” CSR managing director Rob Sindel said.
“The price we are paying for electricity now is some of the highest in the world and we as a nation need to address that.
“It’s not necessarily a federal government problem or an AGL problem or our problem, it is one that the industry needs to think about wholistically because ultimately maintaining electricity for the consumer at a reliable and competitive price we are part of that mix.”
CSR said its profit was also affected by a $60.9 million after-tax loss on the sale of its Viridian Glass business in January, a decision which Mr Sindel described as “removing what is a capital intensive, high energy business from our portfolio”.
Despite “mixed signals” on the year ahead, Mr Sindel predicted conditions would soon recover.
“These things are usually pretty short and sharp and I think once you get through the election cycle, and while we maintain high unemployment levels … I think consumer confidence generally picks up.”
These things are usually pretty short and sharp.
CSR’s Rob Sindel on construction downturn
CSR will pay a final dividend of 13 cents franked at 50 per cent on July 2. In March CSR launched a $100 million share buy-back, but at $3.39 shares are only 3 cents higher now than they were at the beginning of March.
Analysts at UBS, which has a sell rating on CSR, predict the share price would drop to $2.70 in 12-months time.
“We think the market was expecting a soft result for the BP (building products) division, so today’s numbers shouldn’t be too much of a surprise,” UBS said.
“The company is also exposed to global aluminium price risk. These factors mean profits are cyclical and can be volatile.”
Shares in the company dropped 1.48 per cent to $3.34 at the market close on Wednesday.
Anthony is a reporter at The Age.