James Hardie Industries has recorded an annual net loss of $657.92 million after reserving $1 billion for compensation to asbestos victims.

The company posted a loss of $US506.7 million ($665.7 million) for the year to March 31, compared with a profit of $US127.9 million ($168 million) in 2005.

The $1 billion provision follows an agreement last December between James Hardie, the NSW Government and unions for the company to set aside funds over the next four decades to compensate victims of asbestos diseases from products it used to manufacture.

Aside from the asbestos provision, James Hardie’s profit rose by 63% to $US208.9 million ($274.42 million) due to the performance of its operations in the US.

It is also believed that the company is considering moving from its Netherlands headquarters because taxation benefits are not as favourable as once thought.