Rise in Asbestos Claims Not Hurting James Hardie’s Bottom Line

Australian construction company James Hardie says a rise in mesothelioma claims from former workers exposed to asbestos on the job is not affecting its bottom line.

The company recently released its semi-annual profit statement to the Australian stock exchange. The report shows that James Hardie has doubled its profits from the first half of 2013, despite the fact that the number of mesothelioma-related asbestos claims has risen above company expectations. Company profits were reported to be $108.3 million from April to September.

Quoted in the Sydney Morning Herald, James Hardie CFO Russell Chenu said, “We have seen some concerning trends in mesothelioma claims, which we have highlighted previously. We’ve now got a better handle on the ‘what’ and the ‘how’, but what we still don’t understand is the ‘why’.” According to the paper’s website, payments to mesothelioma victims and others with asbestos diseases related to employment at James Hardie account for up to 35 percent of the company’s annual cash flow.

James Hardie, which no longer works with asbestos products, remains one of the biggest names in mesothelioma and asbestos cases worldwide. The company dominated Australia’s asbestos industry for most of the 20th century, running plants in New South Wales, South Australia, Victoria, Queensland and Western Australia. In the early 2000’s, seven former James Hardie executives were found guilty of lying about the adequacy of the compensation fund set up to pay for the rising number of mesothelioma claims.

Chenu says mesothelioma is the most expensive asbestos disease for which the Hardie company must now provide compensation, although the company does not fully understand the cause of the increase in claims. Australia has one of the world’s highest per capita rates of mesothelioma, a rare but aggressive lung-related cancer for which there is no consistent cure. Australia is also home to some of the world’s most aggressive mesothelioma research.

Source:

Wilkins, Georgia, “Asbestos claims rising but James Hardie doubles profit”, November 14, 2013, Sydney Morning Herald website.