The building materials maker James Hardie says its full year profits are down because of asbestos-related compensation claims are more numerous than expected.

The company says its full-year profit dropped almost 50 percent to $194 million.  This is despite a seven percent increase in sales to $2.7 Billion. 

The problem for James Hardie is that earlier predictions of asbestos-related claims peaking between 2014/15 and 2016/17 were wrong, and the actual claims were almost $264 Million higher than the original estimates.  A new report from the big accounting firm KPMG has prompted the company to change its view.

"As claim numbers continue to be elevated, KPMG Australia has formed the view that the increases in mesothelioma claims reporting seen in recent years was a permanent effect, and therefore increased the projected number of future mesothelioma cases," the company said in a statement.

The accounting firm believes James Hardie will increase its contribution to the Asbestos Injuries Compensation Fund will increase by $196 Million to $1.853 Billion.