Boral Ltd on Thursday said it identified financial irregularities in its North American windows business between September 2018 and October 2019, which the building materials maker said would result in a one-off cost.
The irregularites involved the misreporting of inventory levels and raw material and labor costs at the windows plants, and would affect its earnings before interest, taxes, depreciation and amortization by between $20 million to $30 million, Boral said.
Australia’s biggest supplier of building materials said it is conducting an internal investigation into the matter, with oversight by the board and senior management and has hired a forensic account to assist the probe.
Apart from that, Boral said it is reviewing its management, operating procedures and internal control processes for its windows business, which is a part of its North American arm formed from the acquisition of U.S. fly-ash maker Headwaters in 2017.
Sydney-based Boral said any potential ongoing impact on earnings from the windows business beyond October 2019 is still being determined.
The issue was not factored into Boral’s first-half and full-year 2020 guidance provided in early November.
The company warned of a weaker first half during the 2020 fiscal year because of project delays and a softer housing market, while it maintained its full-year 2020 outlook. (Reporting by Nikhil Subba in Bengaluru; Editing by Clarence Fernandez and Christian Schmollinger)