James Hardie top loser on ASX 200 on lower fiscal 2025 earnings outlook

By Aaditya GovindRao

(Reuters) -James Hardie Industries, the world's largest fibre cement maker, forecast lower profit for fiscal 2025 on Tuesday, as high interest rates in its biggest market constrained housing demand and higher marketing spends hurt earnings.

The Dublin-based firm said it expected adjusted net income for fiscal 2025 between $630 million and $700 million. Adjusted net income for fiscal 2024 was $707.5 million, up 17% from a year ago.

Shares of the company fell 9.8% by 0025 GMT, their biggest intraday drop Nov. 8, 2022. It was the worst performer on the broader benchmark index, which was down 0.2%.

Persistently high interest rates and sticky inflation have weighed on the housing sector in the North American market, which makes up for about 74% of the company's global net sales.

Moreover, the firm's selling, general, and administrative (SG&A) expenses soared 23% over the prior year, driven by higher marketing spend and employee costs.

"The continued increase and lack of flexibility in SG&A spend will concern investors (in the) short term," analysts at brokerage Citi said in a note.

At its current rate, the annualised SG&A spend of nearly $500 million is a key driver of softer fiscal 2025 profitability, they added.

James Hardie's fiscal 2024 net sales stood at a record $3.94 billion, up 4% from a year earlier.

"The outlook for the housing markets we participate in globally continues to remain uncertain," the company said in a statement.

(Reporting by Aaditya Govind Rao in Bengaluru; Editing by Shailesh Kuber and Rashmi Aich)