Brickworks Ltd (ASX: BKW) shares are on the move on Thursday.
In morning trade, the building products company's shares are up 2% to $24.42.
This follows the release of the company's half year results before the market open.
Brickworks shares rise on results day
For the six months ended 31 January, Brickworks reported a 6% decline in total revenue to $516 million. This reflects tough trading conditions across all segments.
Things were much better for its underlying earnings, with underlying EBITDA up a whopping 472% to $148 million.
Though, it is worth noting that this is almost entirely down to its Property business swinging from an EBITDA loss of $178 million a year ago to a profit of $38 million. This offset a 4% decline in Building Products Australia EBITDA to $50 million and a 115% decline in Building Products North America EBITDA to a loss of $3 million.
However, excluding revaluations in the prior period, Property EBITDA was down 32% for the half. This reflects lower development profits recorded within the Industrial JV Property Trust, as the Oakdale West Estate reached completion and construction commenced at Oakdale East.
On the bottom line, Brickworks' statutory net profit after tax was up 141% to $21 million (from a loss of $52 million).
This allowed the Brickworks board to continue its long run of dividend increases, lifting its interim payout by 4% to 25 cents per share.
Management commentary
Commenting on its Australian operations, Brickworks CEO, Mark Ellenor, said:
We managed to hold our EBITDA margins by implementing price increases, cost controls and productivity improvements across operations, but the market remains challenging. The result was impacted by historically low residential commencements particularly in our key markets in Victoria and New South Wales during the half.
Speaking about its North American business, Ellenor added:
As flagged in our trading update to the market on 11 March 2025, strong competition in the retail segment has resulted in some loss of market share at the Company owned Brickworks Supply store network. In addition, earnings contribution was lower in all regions due to project delays, and disruption to available product lines in the Brickworks Supply stores.
Outlook
It looks set to be a challenging second half for Brickworks.
Ellenor advised that "demand for building materials in Australia is expected to remain at a cyclical low, with subdued sales activity expected to continue for the remainder of the current calendar year."
Whereas over in North America, he stated that "challenges persist due to high mortgage interest rates and affordability issues. Sales are expected to remain subdued for the remainder of the calendar year."
Brickworks shares are down 15% over the past 12 months.
