Finance Finance News James Hardie takes another asbestos-related profit hit

James Hardie takes another asbestos-related profit hit

James Hardie says asbestos claims are rising. Photo: Supplied
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A forecast of 1000 additional claims for asbestos-related compensation and the cost of a move to expand in Europe has smothered James Hardie’s full-year profit.

The building material supplier’s profit for the year to March fell 47 per cent to $US146.1 ($192.6 million).

Claims in 2017/18 for mesothelioma, a cancer caused by asbestos exposure, were five per cent higher than the previous year, leading consultancy firm KPMG to decide a surge in claims in recent years will not be temporary.

It has elevated James Hardie’s asbestos-related disease liabilities by $A195.8 million, or 12 per cent, to $A1.85 billion.

The remodelled estimate anticipates 4528 mesothelioma claims over the next 50 years – up from the previous forecast of 3520.

James Hardie was involved in the manufacture and distribution of products containing asbestos until 1987.

Asbestos-related claims often take more than 40 years from exposure to settlement.

Also impacting the bottom line was $US10 million in costs related to James Hardie’s acquisition of German-based building material supplier Fermacell.

James Hardie’s adjusted net operating profit, which excludes asbestos liabilities, rose 17 per cent to $US291.3 million, beating than the company’s February estimate of $US260 million to $US275 million.

Shares in James Hardie were up 92 cents, or 4.1 per cent, at $23.37 at 1510 AEST.