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CSR still waiting for housing recovery

The property downturn has caused a 50 per cent profit fall for building products maker CSR, which says a recovery in the sector is unlikely before mid-2013.

CSR's net profit of $17.5 million for the six months to September 30 was down from $34.9 million on the previous corresponding period, with the fall reflecting a 14 per cent decline in housing construction over the same period.

The result included $2.9 million in costs from the restructure of CSR's building products business and its aluminium joint venture, in response to weak activity.

"The key external drivers that impact CSR's profitability were all materially worse this period," managing director Rob Sindel said on Wednesday.

CSR expects its profit for the full year to March 31 in the range of $35 million to $45 million, down from $76.3 million in the previous corresponding period.

Despite the profit fall, CSR shares had added 8.5 cents, or 5.5 per cent, to $1.64 by 1514 AEDT.

The company forecast total housing starts in Australia in the year to the end of March 2013 to be down nine per cent from the previous 12 months.

Mr Sindel said there were signs of a recovery beyond that, most notably a rise in finance approvals over eight consecutive months.

"A combination of falling interest rates and improved state government stimulus programs in New South Wales, Queensland and South Australia should enable a moderate recovery in residential activity in the next financial year," he said.

But any recovery is set to be modest in its initial phases, while consumer and investor confidence returned, he said.

CSR's glass business, Viridian, remains a weight on the company, making a loss of $11.7 million in the six months to September, due to low sales volumes and the high Australian dollar.

Viridian is the most trade-exposed and highest fixed-cost business in CSR's portfolio.

The building products division, which makes products including Gyprock and PGH Bricks, delivered earnings of $43.4 million in the six months to September, down 12 per cent on the same period in the previous year.

First half earnings from CSR's aluminium business dropped by 57 per cent to $18.3 million.

CSR halved its interim dividend to three cents per share.