Rising power costs and concerns about the outlook for housing construction have overshadowed CSR's lift in half year profit.
CSR made a net profit of $118.7 million in the six months to September, up four per cent on a year ago, but its shares dropped more than five per cent to $4.48.
The company behind products including Gyprock plasterboard and Bradford insulation said the first half profit lift was thanks largely to a five per cent earnings jump in its core building products business, and land sales.
Managing director Rob Sindel said continued growth from Gyprock, Hebel, PGH and Bradford aligned with a stable housing construction market, and solid conditions on the east coast.
"The detached housing market in Australia, which accounts for almost 50 per cent of CSR's building products' revenue, remains stable, underpinned by record low interest rates and steady population growth," Mr Sindel said.
"We remain confident in the overall housing outlook, while the high-rise market is moderating, the detached market has been relatively stable."
Mr Sindel said CSR maintains a steady multi-residential pipeline able to support demand for its its products.
New energy contracts will impact the company's aluminium interests and its 25 per cent share in the Tomago smelter, after the division's earnings lifted 27 per cent on the back of a five-year-high in aluminium prices.
New power supply contracts, effective from Wednesday, will increase the costs of aluminium production by $250 per tonne, a hit of between $150 million and $250 a year for Tomago.
"Aluminium smelting is an incredibly energy intensive process which is why there is particular angst around ensuring reliability and affordability in energy," Mr Sindel said.
Citi analyst Simon Thackray said the company's interim dividend, which was up four per cent from a year ago at 13.5 cents, was disappointing, well below Citi's estimate of 15 cents per share.
CSR said it expects its full year profit before significant items will be within the current range of analysts' forecasts of $187 million to $223 million.
"We saw the outlook commentary as fairly muted," Mr Thackray said.
CSR HALF YEAR RESULTS:
* Net profit up 3.7 pct to $118.7m
* Revenue up 7 pct to $1.32bn
* Interim dividend up 0.5 cents to 13.5 cents, 50pct franked
