Tile and sanitaryware manufacturer Ceramic Industries on Thursday said headline earnings declined 26.9% to R64.5 million for the six months ended 31 January 2012, while headline earnings per share decreased to 377.5 cents from 522 cents previously.
A dividend of 110 cents was declared from 140 cents per share in the previous period.
Group operating profit declined 31.9% to R65.8 million and revenue increased 4.9% to R809.4 million rand.
The group said that in the period under review trading conditions in the building and construction industries in both South Africa and Australia remained subdued, featuring low levels of public and private sector investment.
It added that in a deliberate strategy to retain market share, it reduced average selling prices by 4%, eroding profitability of the business. Margins across the group declined by 4.4%.
Operating profit from tiles decreased 35.6% to R58.5 million.
Finance income for 2012 includes a R15.2 million foreign exchange gain on the repayment by the Australian operation of a portion of its loan account, Ceramic Industries said.
“Notwithstanding payment of a special dividend of R304 million during the prior reporting period, the group noted that its cash reserves remained robust at R305.5 million.
Ceramic's sanitaryware division, comprising its Betta and Aquarius operations, continued to deliver improved results, based on remedial measures implemented over the past two years, it said.
Betta's production volumes increased to 621 892 pieces from 544 954 pieces in 2011, and sales volumes increased to 648 215 pieces from 567 904 pieces.
Aquarius, which produces drop-in and free-standing acrylic baths for the local and export market saw production volumes increase to 67 232 pieces from 49 884 pieces, and sales volumes increased to 69 108 pieces from 53 627 pieces.
Ceramic Industries' sanitaryware division increased operating profit by 27.2% to R7.3 million.
In the company's tile division experienced sales of 16.7 million mSquared which outstripped production of 15.0 million mSquared. Export sales increased to R95.4 million.
Production volumes increased to 7.2 million mSquared and sales volumes grew to 8.0 million mSquared at the group's Pegasus factory which manufactures low cost large format glazed tiles for the DIY and contract market.
Production volumes declined to 2.4 million mSquared at Vitro which produces at the up-market domestic and contract sectors.
Production volumes increased to 2. 7 million mSquared and sales volumes improved to 3.0 million mSquared at Samca Floor Tiles, who's factory's range comprises predominantly large format fashionable pressed glazed floor tiles.
While, Samca Wall Tiles, which is the only factory in the group and the country that manufactures wall tiles saw production volumes decline to 2.6 million mSquared.
In contrast to the modest improvement in operational performance reported by the South African factories, the group's Australian plant, Centaurus, delivered a particularly disappointing result.
This operation, which comprises 11% of Ceramic's turnover, reported a substantial decline in both production and sales volumes, and caused a disproportionate impact on the group's profitability.
The business operated at a loss of R24 million for the period.
Looking ahead, the company said current challenging trading conditions were expected to prevail in the industry for the foreseeable future.
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