The Brickworks Limited (ASX: BKW) share price has come under pressure this morning following the release of a trading update.
The building products company's shares are up 1% to $16.01 in early trade.
What did Brickworks announce?
In response to the release of an update by Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) last night, Brickworks has decided to release a trading update of its own this morning.
This is because Washington H. Soul Pattinson's performance has a flow on impact on Brickworks' earnings through the equity accounted profit of its 39.4% shareholding in the investment company.
Washington H. Soul Pattinson advised that its half year net profit after tax for the period ending January 31 is likely to be in the range of $45 million to $55 million. Whereas its regular half year net profit after tax (excluding the impact of non-regular items) is expected to be in the range of $120 million to $130 million.
In light of this, in line with the outlook the company provided at its annual general meeting, Brickworks continues to expect to deliver a material drop in half year profit.
Management expects its statutory net profit after tax to be down 49% on the prior corresponding period. Whereas its underlying net profit after tax from continuing operations is forecast to be down 37% on the prior corresponding period.
The main drag on its performance during the half is the Brickworks Building Products Australia business. Earnings from this business are expected to be significantly lower than the prior corresponding period due to high energy costs, low building activity, particularly difficult conditions in Western Australia, and extensive plant shutdowns to complete maintenance and upgrade works.
Management intends to release its result for the first half to the market in two weeks on March 26.
