Adbri (ASX:ABC) share price soars 9% amid higher profit in full-year earnings

Shares in the materials producer are heading northwards today…

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Key points

  • The Adbri share price is climbing today
  • The construction material producer released its full-year results this morning
  • The company declared a final dividend of 7 cents per share payable on 11 April

The Adbri Ltd (ASX: ABC) share price is soaring after the company released its full-year results for the year ending 31 December 2021.

In it, the construction material producer revealed an increase in profit and revenue and a final dividend of 7 cents per share.

At the time of writing, the Adbri share price is up 9.3% at $3.30. To compare, the S&P/ASX All Ordinaries Index (ASX: XAO) is up 0.38%.

So, what did Adbri reveal today to make its share price fly?

Adbri's financial results for 2021

The Australian producer's full-year financial results were as follows:

  • Revenue (from continuing operations) up 8% to $1.56 billion
  • Earnings before interest and tax (EBIT) up 18% to $174.9 million
  • Net profit after tax (NPAT) up 25% to $116.7 million
  • Net debt at $437.4 million.

The company acknowledged an impact on its margins due to COVID-19. As such, it saw a drop in EBITDA margin from 18.7% in 2020 to 17.5%.

Due to these difficulties, it also saw $16.2 million in "non-recurring COVID and operational costs", which were "partially offset by targeted cost savings netting $13.6 million".

Adbri will pay a final fully franked dividend of 7 cents per share on 11 April.

This, along with its interim dividend payment for the year, accounts for a payout ratio of 68.5% of underlying NPAT.

The company has a trailing price to earnings ratio (P/E) of 16.8.

During the 2021 calendar year, the Adbri share price fell 15.8%.

What's next for Adbri?

Looking forward, the company has climate change front of mind.

In five years, the company aims to bring down its greenhouse gas emissions by 7%, and to use 50% of kiln fuel from alternative South Australian sources.

Since 2019, it has achieved a 4% reduction, 2% of which was achieved last year. It also saw 25% of its fuel source achieved as per its FY19 baseline target.

In a press release this morning, managing director and CEO Nick Miller said: "We are progressing the roadmap for our aspiration to achieve net zero Greenhouse Gas emissions by 2050."

Commenting further on the 2021 results, Miller said:

The result is particularly pleasing in the context of significant COVID related challenges and disruption during the year.

Mining and construction demand remain buoyant while the construction materials sector is benefiting from a strong pipeline of infrastructure projects and residential construction approvals.

Adbri remains in a robust financial position with resilient cash flow and a strong balance sheet. Investment grade metrics and available liquidity of $453.7 million ensure we remain well funded to continue with transformative strategic initiatives that drive improved asset performance and operational efficiency, supporting higher shareholder returns over the long term.

Adbri share price snapshot

Since the beginning of 2022, the Adbri share price has increased by 13.8%. To compare, the S&P/ASX 200 Materials Index (ASX: XMJ) has decreased by 2%.

The Adbri share price saw a 52-week high of $3.87 in August 2021 and a 52-week low of $2.70 at the end of January.

The company has a market capitalisation of $1.96 billion.

Motley Fool contributor Alice de Bruin has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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