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Brickworks says a local homebuilding surge and a manufacturing network relatively unscathed by COVID has helped it boost first-half profit by 22 per cent.

The $2.9 billion brick and concrete firm this morning reported net profit of $71 million for the six months to January 31, even as total revenue dropped 4 per cent to $432 million.

The company will boost its interim dividend by 1 cent to 21 cents, payable on April 28.

Brickworks managing director Lindsay Partridge.

Brickworks managing director Lindsay Partridge.Credit:AFR

Brickworks makes bricks, masonry blocks, pavers, roof tiles, floor tiles, precast walling and flooring panels and fibre cement walling panels used in the building industry.

It said earnings before tax at its Australian building products division was up 60 per cent as housing demand soared amid low interest rates, an increase in household savings and a range of government stimulus measures in response to the COVID-19 pandemic.

By contrast, North American operations were significantly disrupted by the pandemic, resulting in EBIT decreasing by 33 per cent.

Brickworks said the short-term outlook for detached housing in Australia was buoyant, though the level of activity in medium and high-rise developments continues to decrease, particularly in Sydney and Melbourne.

Looking beyond the current stimulus-induced surge in activity, significant uncertainty remains.

“Whilst conditions are currently supportive for housing investment, inflationary pressures and the subsequent risk of higher interest rates appear to be increasing,” the company said on Thursday.

“In addition, fundamental questions remain in relation to the effectiveness of the vaccine roll-out, and the timing and extent of a return to immigration and full employment.

“It is also clear that government stimulus has brought forward a large volume of work that has the potential to leave a void once the existing pipeline is exhausted.”

Shares in Brickworks – which holds a 40 per cent stake in fellow ASX firm Washington H Soul Pattinson – have fallen 1.5 per cent so far in 2021, and were last worth $18.91.

The company’s share price has gained 25.8 per cent over the past 12 months, lagging a 43 per cent rise for the wider ASX 200.

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