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MELBOURNE - Australian building materials maker Rinker Group Ltd, fighting a US$12 billion ($18.2 billion) takeover bid by Mexico's Cemex, met forecasts with a 12 per cent rise in first-half profit, but trimmed its outlook for the full year.
Rinker, which makes around 85 per cent of its earnings in the US, said it now expects full year earnings per share to come in at the bottom end of its forecast range of 84 to 90 US cents, or up around 14 per cent on last year, due to the US housing downturn.
"This assumes a further modest deterioration in housing in Florida," Rinker Chief Executive David Clarke said in a statement.
Net profit rose to US$410.4 million for the six months to September from US$365.5 million a year earlier.
Three analysts on average had expected a net profit of US$409.3 million.
Rinker's shares have surged 34 per cent to A$18.61 ($21.73) since Cemex, the world's No3 cement maker, bid A$13 per share on October 27.
Rinker has rejected the offer as opportunistic and cheap.
Analysts have said Cemex would have to increase the offer to between A$19 and A$21 a share to win over Rinker investors.
Buying Rinker would solidify Cemex's dominance in the US cement market, open the door in Australia and give it a foothold in China, where Rinker has four plants.
"Cemex may be willing to wait for some less flattering results and then raise the bid early next year to get investors over the line," Merrill Lynch analyst Simon Archer said before Rinker released its first-half report.
Rinker this week bought three quarries and a block plant in Kentucky for around US$25 million.
First-half sales at the group's US arm, Rinker Materials, grew 15 per cent to US$2.27 billion and earnings before interest and tax (EBIT) rose 18 per cent to US$576 million, as strong price increases for crushed rock, cement, concrete and asphalt offset lower volumes.
Clarke said the group had felt the impact of the drop in homebuilding in Florida for several months, but said it expected a further decline in volumes for at least the next six months.
At its Australian arm, Readymix, sales rose 5 per cent to A$790 million, but EBIT fell 6 per cent to A$105 million due to higher costs and weak price increases.
- REUTERS
