Shares in Australia's largest building materials company Boral have shot up to a three-year high after a 73 per cent jump in half year profit, excluding significant items.
The company lifted underlying net profit to $90 million on the back of better housing and road construction markets, cost cutting and dry weather conditions.
However, the company on Wednesday also warned of a slowdown in activity and earnings in the second half.
Boral recorded a net loss of $26 million for the half, but that includes $117 million in one-off accounting charges related to its Gypsum plasterboard joint venture, due to be completed on February 28, that it says will be offset by gains in the second half.
Sales revenue was up four per cent on last year, at $2.87 billion.
Boral shares were up 42 cents, or 8.4 per cent, to $5.42 at 1300 AEDT.
All four of its divisions lifted earnings, although the American sector still recorded a loss.
Chief executive Mike Kane highlighted a $23 million turnaround in the Australian building products division and a 6.0 per cent lift in its largest division, building materials and cement.
"(That) was driven by strong project activity, very dry weather conditions in NSW and Queensland, and the benefit of restructuring, and overhead cost reduction initiatives," he told reporters.
"Despite expected underlying performance improvements, there will be a skew of earnings to the first half compared to the second half due to higher major project volumes, dry weather conditions in the first half and the impact of the (Gypsum) joint venture."
The company achieved $60 million in cost savings - helped by cutting 1,000 jobs - and plans to use much of a $500 million payment from Gypsum JV partner USG to get its $1.39 billion net debt down.
Boral declared a fully-franked interim dividend of 7.00 cents, up from 5.00 cents for the same period last year.