UPDATE 12.45pm: Building products maker James Hardie's first-half profit has fallen 35 per cent but the company says there are good signs in its key market, the United States.

James Hardie made a net profit of $US83.5 million ($A80.86 million) in the six months to September 30, down from $US128.4 million ($A124.34 million) in the same period in the previous year.

The result included an unfavourable adjustment to the company's asbestos liabilities due to a stronger Australian dollar.

Net operating profit excluding items such as asbestos and legal liabilities in the six months to September was $US78.6 million ($A76.11 million), down two per cent from $US80.6 million ($A78.05 million) in the previous corresponding period.

Chief executive Louis Gries said there were signs of a sustainable housing recovery in the United States, where the company generates a majority of its earnings.

But, the Australian market remains subdued despite recent interest rate cuts, reflecting low levels of confidence among domestic consumers.

The New Zealand market was improving, but remained at near cyclical lows, he said.

James Hardie said it noted analysts' forecasts of a full-year net operating profit, excluding asbestos liabilities, in a range of $US147 million ($A142.35 million) and $US178 million ($A172.37 million).

That would be an improvement on a net operating profit of $US140.4 million in the previous year.

James Hardie declared an interim, unfranked dividend of five US cents per share.

James Hardie shares were off 18 cents, or 2.01 per cent, to $8.79.

The West Australian

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