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Australia's CSR Sees FY EBIT Fallling 5%

Australian conglomerate CSR Ltd said on Tuesday its earnings before interest and tax (EBIT) this year were likely to be 5% down on the previous year, before one-offs, hurt by lower sugar prices.

CSR, Australia's top sugar producer and a leading building products maker, said EBIT from its sugar operations was expected to be down between 40-45%.

It said raw sugar prices had fallen 5-15% since the start of this financial year, compounded by the strong Australian dollar.

Wet weather also delayed the start of the milling season to the latest start on record.

Net profit after tax for its fiscal year to March 2008 would also be affected by increased interest costs following the recent acquisition of the Pilkington glass business, the company said.

In June, CSR agreed to buy Pilkington Australasia from Japan's Nippon Sheet Glass for A$690 million ($566 million) to add glass making to its businesses, but some analysts said it overpaid for the asset.

CSR said at the time the acquisition would be earnings per share neutral in fiscal 2008, and would start adding to CSR's profits from the following year, excluding one-off costs.

In a statement on Tuesday, CSR said the decline in its sugar operations would be largely offset by improvements in its building products division, where EBIT is seen rising 15-20% from the previous year, excluding the Pilkington acquisition.

Including Pilkington, total building products EBIT is expected to rise 70-75%.