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May 22, 2013, 8:11 p.m. EDT

James Hardie to pay special dividend

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By Ross Kelly

SYDNEY--James Hardie Industries PLC Thursday declared a special dividend and gave an upbeat assessment of the U.S. housing sector's prospects, even as continuing compensation payments to asbestos victims continued to drag on its bottom line.

Net profit for the year to March 31, including compensation payments, asset writedowns and tax adjustments, fell 92% to US$45.5 million from US$604.3 million a year earlier.

Operating profit, which strips out those items, edged back 2% to US$140.8 million, just missing a Goldman Sachs forecast of US$141.9 million and beating a Citigroup forecast of US$136.9 million.

Operating profit in the fourth quarter fell 11% to US$30.7 million.

James Hardie, which is one of the biggest makers of home siding in the U.S. and generates most of its profits there, said housing starts and house prices are both increasing in the world's biggest economy.

"The company expects that the improvement in the U.S. operating environment reflects a sustainable recovery in U.S. housing, although the recovery is expected to occur over a protracted period," it said in a filing.

The improved conditions are expected to result in the company recording improved profit margins in its U.S. division in its current fiscal year, it said.

It declared a final dividend of 13 U.S. cents per share and a special dividend of 24 U.S. cents per share. The special dividend was paid out of capital held aside for an up to US$150 million share buyback that wasn't fully depleted. Thursday, however, the company launched a new buyback program for up to another 5% of its shares on issue.

"James Hardie is a very strong cash-generating company," a spokesman said. After accounting for asbestos liabilities and the dividends, the company still had US$153 million net cash at March 31, the spokesman said.

Write to Ross Kelly at ross.kelly@wsj.com

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