Boral (ASX:BLD) share price hits 52-week low following guidance update

The company's shares are in the red on Tuesday…

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Key points
  • Boral shares hit a 12-month low after a company trading update and earnings guidance
  • Boral earnings have been impacted by strong rainfall in NSW and Queensland, along with rising fuel prices
  • Underlying EBIT is expected to be in the range of $145 million to $155 million in FY22

The Boral Ltd (ASX: BLD) share price is slipping today following the company's latest announcement on its earnings.

During late morning trade, Boral shares are fetching for $3.31, down 4.06%. The company's share price hit a new 52-week low of $3.21 early in the session.

It's worth noting that in the past month, the building materials company's shares have lost more than 10% in value.

A construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer.

Image source: Getty Images

Boral experiences tough trading conditions for FY22

Investors are sending the Boral share price lower following the company's announcement of a disappointing earnings guidance.

In its statement, Boral advised that sales volumes have been impacted for FY22 as a result of macroenvironmental factors. This relates to the strong rainfall that recently occurred in New South Wales and Queensland, as well as sharp increases in fuel and coal prices.

The latter has been a knock-on effect from the war between Russia and Ukraine which has sent commodities prices soaring.

Consequently, underlying earnings before interest and tax (EBIT) for Boral's continuing operations (excluding Property) in FY22 is anticipated to be between $145 million and $155 million.

However, management noted that this is under the assumption that there are no further several weather-related events.

The company stated that its exposure to coal prices is unhedged for the second half of FY22, while expected diesel usage is only hedged until April 2022.

In addition, higher fuel prices were also "exacerbating supply chain constraints", as previously disclosed.

Boral CEO and managing director Zlatko Todorcevski commented:

The impact on sales volumes of the extreme rainfall across New South Wales and Queensland in late February and early March have adversely impacted Boral's earnings by ~$23 million. The exceptional weather conditions have prevented us from delivering products to our customers in many regions and caused significant production disruptions to our operations.

In addition, unusually extreme and rapid increases in the price of coal and diesel have recently occurred. This cost escalation is not expected to be recovered by our January and February product price increases, with the future cost impact based on current forward prices.

Boral share price summary

Over the past 12 months, the Boral share price has plummeted by almost 40% in value.

Based on today's price, Boral commands a market capitalisation of roughly $3.69 billion, with approximately 1.1 billion shares outstanding.

Motley Fool contributor Aaron Teboneras 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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