Asbestos drives James Hardie to loss

James Hardie reported first quarter 2010 sales of US$ 284 million, down -22% on the US$ 365 million recorded for the same period last year. Following a pre-tax profit of US$ 22.9 million for the first quarter of 2009, the company reported a loss of -US$ 57 million for the first quarter of 2010.

Prior to tax adjustments, asbestos compensation, and Australian Securities and Investments Commission (ASIC) expenses relating to misleading disclosure about asbestos, the company reported a net operating profit of US$ 41 million, up +4% on the previous year.

Louis Gries, CEO at James Hardie said, "While the US residential construction market appears to be ‘nearing the bottom', it remains too early to ascertain the timing, rate or extent of any potential recovery.

"Earnings this quarter benefitted from lower costs, particularly for energy, pulp and freight," he said.

"Our priority remains to ensure the company is positioned to drive its long-term strategy, sustain earnings in a low demand environment, and retain the operational flexibility to increase capacity when the recovery comes," he concluded.

Asbestos compensation adjustments and ASIC expenses for the quarter amounted to US$ 119.8 million and US$ 600000 respectively.