The Adbri Ltd (ASX: ABC) share price is slightly down today after the company announced a major management shakeup.
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At the time of writing, the Adbri share price is down 0.62% at $3.20.
Shakeup at the top
The Adelaide-based constructions material manufacturer made quite a few changes to its executive leadership team today as part of the company’s restructuring efforts.
Adbri says the changes consolidate the current 3 operating divisions into 2. The 2 new divisions will be Cement and Lime; and the newly formed Concrete, Aggregates & Masonry, which combines the previous Concrete & Aggregates, and Concrete Products divisions.
As a result of these divisional changes, the company has made a number of executive rotations, including the redundancy of Cement and Lime general manager, Brad Lemmon.
A major client lost
The restructuring is part of a major strategy to get the company back to strength following this year’s bushfires and the COVID-19 pandemic. In its half-year FY20 results, Adbri reported a 14% drop in profits to $47.6 million.
The company was also rocked in July when Alcoa Corp (NYSE: AA), one if its biggest American clients, decided not to renew a long-standing supply contract with Adbri-owned Cockburn Cement.
That decision saw more than $515 million stripped from the value of the company, with Adbri’s share price plunging by more than 30% at the news.
The announcement also saw the termination of a $70-million a year contract, as well as a 50-year relationship between the two companies.
In September however, Adbri got some of its shine back after announcingit had won a four-year contract extension to supply cement and lime to BHP Group Ltd‘s (ASX: BHP) Olympic Dam mine. That contract is worth $160 million over the full term.
About the Adbri share price
Overall, the Adbri share price has lost about 9% in 2020. As mentioned, the share price dropped to as low as $2.14 following the termination of the Alcoa deal in July. However the Adbri share price has regained momentum after the BHP deal was announced, rising steadily since September to today’s level.
Adbri commands a market cap of $2.1 billion.
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Motley Fool contributor Eddy Sunarto owns shares of BHP Billiton Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.