Exhibit 99.1

Appendix 4D

James Hardie Industries N.V.
ABRN 097 829 895

Results for the 2nd Quarter and Half Year ended 30 September 2003

Contents

1.

Media Release

2.

Results at a Glance

3.

Management’s Discussion and Analysis for 2nd Quarter and Half Year

4.

Consolidated Financial Statements

5.

Management Presentation

The above results documents comprise the information required by Rule 4.2A and the statement required by rule 4.2C.2.

The information contained in the above documents should be read in conjunction with the James Hardie 2003 Annual Report which can be found on the company website at www.jameshardie.com.

Incorporated in The Netherlands with corporate seat in Amsterdam. The liability of members is limited.

2nd Qtr Operating Profit Up 43% to US$32.8m
Half Year Operating Profit up 45% to US$65.7m

James Hardie today announced a 43% increase in 2nd quarter operating profit from continuing operations to US$32.8 million for the three months ended 30 September 2003.

Among the 2nd quarter highlights, net sales increased 24%, gross profit was up 26% and EBIT² increased 35% to US$47.9 million.

The USA Fibre Cement business was again the standout performer lifting sales 24% and EBIT² 32% compared to the same period a year ago. In Asia Pacific, EBIT² increased 16%.

The 2nd quarter result lifted half year operating profit from continuing operations to US$65.7 million. EBIT² from our USA Fibre Cement segment was up 36% for the half and Asia Pacific Fibre Cement was up 15% for the half.

Basic earnings per share from continuing operations increased 54% from US 5.0 cents to US 7.2 cents for the 2nd quarter and 46% from US 9.9 cents to US 14.5 cents for the half year.

The half year net operating profit including discontinued operations of US$67.5 million includes income of US$1.8 million primarily related to the sale of our New Zealand Building Systems business on 30 May 2003. The net operating profit including discontinued operations for the half year of the previous year includes a profit of US$55.1 million primarily related to the sale of our Gypsum business.

     2nd Quarter and Half Year at a Glance

Unless otherwise stated, results are for continuing operations only and comparisons are of the 2nd quarter of the current
fiscal year versus the 2nd quarter of the prior fiscal year

Commentary

James Hardie’s CEO, Peter Macdonald said: “The second quarter result mirrors the strong performance of the first quarter and prospects for the balance of the year remain encouraging.

“The outlook for housing construction in North America is positive and it now appears likely that housing starts will finish the year at a new record high.

“We are continuing to penetrate both the exterior and interior product markets of the USA without sacrificing margin, and this is resulting in strong top line growth,” Mr Macdonald said.

USA Fibre Cement – Continued Strong Growth and Higher Margins

Net sales increased 24% to US$191.4 million in the 2nd quarter due to a 16% increase in sales volume to 390.5 million square feet and a 7% increase in the average selling price to US$490 per thousand square feet.

Strong growth continued in both the exterior and interior product markets.

Average selling prices were again up due to sales of higher-priced, differentiated products increasing as a proportion of total sales.

Strong revenue growth and further progress on costs lifted EBIT 32% to US$53.7 million for the quarter and 36% to US$107.8 million for the half. The EBIT margin for the quarter increased to 28.1% and was 28.5% for the half.

During the quarter, the new line to produce the pre-painted ColorPlus™ Collection was commissioned at our plant in Illinois, and we continued to ramp up the recently upgraded capacity at the plant at Blandon, Pennsylvania and the new panel production line at our plant in Waxahachie, Texas.

Australia and New Zealand Fibre Cement – Higher Net Sales

Net sales increased 17% to US$47.8 million for the quarter due to a favourable exchange difference. New housing activity in Australia was weaker compared to the same period a year ago but was above industry expectations. In New Zealand, housing activity was affected by poor weather in some regions.

EBIT was up 2% for the quarter and 8% for the half. The EBIT margin was 18.0% for the quarter and 18.5% for the half.

Philippines – Small Operating Profit

The Philippines recorded a small operating profit in both the quarter and the half year due to increased sales and manufacturing cost savings.

Chile – Small Operating Profit

The business recorded a small operating profit for both the quarter and the half year as sales more than doubled.

USA Hardie® Pipe – Strong Growth and Manufacturing Efficiencies

Strong top line growth continued as the business further penetrated its target market in Florida, USA increasing share to an estimated 20%. More manufacturing efficiency gains were achieved. However, the business continued to incur losses.

Europe

Awareness of our backer and siding products increased among distributors, builders and contractors following their launch in the U.K. and French markets in the first quarter. Market response to these products has been favourable and the rate of penetration is in line with our expectations.

Artisan Roofing

Plant testing and market trials continued during the quarter following the commissioning of our plant in June 2003. Sales of our new generation of fibre cement roofing products are expected to begin in the third quarter.

Interim Dividend

The Board has declared an interim dividend of US 2.5 cents a share. The dividend will be paid on 16 December 2003 to shareholders registered on 27 November 2003.

Outlook

In North America, the current level of housing activity is expected to continue, buoyed by low mortgage rates, strong house prices, an improving economy, low inventories of new homes for sale and large backlogs or orders for homes to be built.

Indicators of future activity, including housing starts, permits and builder confidence, all remain at high levels.

The National Association of Home Builders announced in September 2003 that “Housing production for 2003 should easily surpass last year’s very healthy 1.71 million and will likely approach the 1.8 million mark”. This follows housing start numbers exceeding a seasonally adjusted rate of 1.8 million for the past four months.

Further strong top-line growth and profitability is expected as our USA Fibre Cement business continues to penetrate the northern and southern regions of the country and the exterior and interior product markets.

In Australia and New Zealand, the commercial and renovations segments should remain strong but no improvement in new residential housing is expected. A better operating result is expected in the third quarter following the manufacturing performance of our Rosehill, NSW plant returning to more acceptable levels at the end of the second quarter and strong demand for higher-priced differentiated products such as Linea® weatherboards in New Zealand.

In the Philippines, building and construction activity is expected to increase as seasonal conditions become more favourable. Further share growth and manufacturing cost savings are expected.

In Chile, recent signs of improved construction activity are expected to continue. Further market penetration and share growth is expected as awareness of our expanded product range continues to grow.

The USA Hardie® Pipe business is continuing to increase production to meet growing demand, improve operating efficiency and reduce costs.

In Europe, demand for our products is expected to grow as awareness among builders, contractors and distributors increases.

Overall, the strong growth momentum evident in the first half is continuing into the third quarter and there is no sign of any near-term threat to highly satisfactory results overall for the full year.

We are comfortable with the current range of analysts’ forecasts of operating profit from continuing operations for the 2004 fiscal year of between US$118 million and US$131 million*.

Ends.

Media/Analysts call:

Greg Baxter – Executive Vice President
Telephone: 61 2 8274 5377
Mobile: 0419 461 368
Email: [email protected]

Or

Steve Ashe
Vice President Investor Relations
Telephone: 61 2 8274 5246
Mobile: 0408 164 011
Email: [email protected]

Facsimile: 61 2 8274 5218

The release and the accompanying MD&As and management presentation, along with the audio webcast of the presentation, are available at www.jameshardie.com

Notes

1.

This media release forms part of a package of information about the company’s results. It should be read in conjunction with the other parts of this package, including Management’s Discussion and Analysis (MD&A), a Management Presentation, a Financial Report and a Results at a Glance document.

2.

EBIT is defined as operating income. EBIT margin is defined as EBIT as a percentage of our net sales. We believe EBIT and EBIT margin to be relevant and useful information as these are the primary measures used by our management to measure the operating profit or loss of our business. EBIT is one of several metrics used by our management to measure the cash generated from our operations, excluding the operating cash requirement of our interest and income taxes. Additionally, EBIT is believed to be a primary measure and terminology used by our Australian investors. EBIT and EBIT margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with accounting principles generally accepted in the United States of America. EBIT and EBIT margin, as we have defined them, may not be comparable to similarly titled measures reported by other companies.

The use of EBIT and EBIT margins in this document are equivalent to the US GAAP measures of operating income and operating income margin.

3.

Operating profit from continuing operations is equivalent to the US GAAP measure of income from continuing operations.

4.

Net operating profit including discontinued operations is equivalent to the US GAAP measure of net income.

Disclaimer
This media release contains forward-looking statements. Words such as “believe,’’ “anticipate,’’ “plan,’’ “expect,’’ “intend,’’ “target,’’ “estimate,’’ “project, “ “predict, “ “forecast,’’ “guideline,’’ “should,’’ “aim’’ and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors, which are further discussed in our reports submitted to the Securities and Exchange Commission on Forms 20-F and 6-K and in our other filings, include but are not limited to: competition and product pricing in the markets in which we operate; general economic and market conditions; compliance with, and possible changes in, environmental and health and safety laws; dependence on cyclical construction markets; the supply and cost of raw materials; our reliance on a small number of product distributors; the consequences of product failures or defects; exposure to environmental, asbestos or other legal proceedings; and risks of conducting business internationally. We caution you that the foregoing list of factors is not exclusive and that other risks and uncertainties may cause actual results to differ materially from those contained in forward-looking statements. Forward-looking statements speak only as of the date they are made.

2nd Quarter and Half Year — 30 September 2003

All comparisons are against the 2nd quarter or half year of the previous fiscal year. All dollar amounts are in US$ millions. Results are for continuing businesses only unless otherwise stated. Note: This document should be read in conjunction with other 2nd quarter and half year results materials including a Media Release, a Management’s Discussion and Analysis, a Management Presentation and a Financial Report.

James Hardie Industries N.V.
Results for 2nd Quarter Ended 30 September 2003

Unless otherwise stated, results are for continuing operations only and comparisons are of the
2nd quarter of the current fiscal year versus the 2nd quarter of the prior fiscal years.

Total Net Sales

Total net sales increased 24% compared to the same quarter of the previous year, from US$202.1 million to US$251.6 million.

Net sales from USA Fibre Cement increased 24% from US$154.7 million to US$191.4 million due to continued strong growth in sales volumes and higher selling prices.

Net sales from Asia Pacific Fibre Cement increased 22% from US$44.9 million to US$54.8 million due mainly to favourable exchange differences.

Net sales from Other Fibre Cement increased 116% from US$2.5 million to US$5.4 million as the Chilean flat sheet business and the USA-based Hardie® Pipe business continued to grow.

USA Fibre Cement

Net sales increased 24% from US$154.7 million to US$191.4 million.

Sales volume increased 16% from 337.7 million square feet to 390.5 million square feet, due to strong growth in primary demand for fibre cement and a favourable housing construction market.

Residential housing activity remained healthy during the quarter buoyed by low mortgage rates, strong house prices, low inventory levels of new homes for sale and improved consumer confidence.

Strong growth continued in both the interior and exterior product markets and in the northern and southern regions of the country as our products continued to take share from alternative materials.

The average net selling price increased 7% compared to the same quarter of the previous year from US$458 per thousand square feet to US$490 per thousand square feet. This was due to an increased proportion of sales of higher-priced, differentiated products and a price increase in some regions implemented in the first quarter of this fiscal year.

In the exterior products market, there was continued strong growth in sales of higher-priced, differentiated products such as vented soffits, Heritage® panels, the ColorPlus™ Collection of pre-painted siding and Harditrim® XLD™. Our share of the interior cement board market continued to increase.

During the quarter, we continued to ramp-up the recently upgraded Blandon, Pennsylvania plant acquired from Cemplank in December 2001, and the 160 mmsf panel production line at our Waxahachie, Texas plant. Also during the quarter, we commissioned our new proprietary pre-finishing line at our Peru, Illinois plant. This is expected to significantly reduce painting costs for our ColorPlus™ Collection of exterior siding, and help accelerate our market penetration in the northern region.

Asia Pacific Fibre Cement

Net sales for this segment increased 22% from US$44.9 million to US$54.8 million. Sales volume increased 9% from 95.5 million square feet to 104.5 million square feet.

Australia and New Zealand Fibre Cement

Net sales increased 17% from US$40.8 million to US$47.8 million. In Australian dollars, net sales decreased 3%.

The decrease in local currency net sales was due to a 2% fall in sales volume from 79.6 million square feet to 78.2 million square feet, and a 1% decrease in the average net selling due mainly to a change in product mix. The decrease in sales volume reflects lower than expected sales performance, and reduced fence sales compared to the same quarter last year, when we experienced higher sales due to the effect of sales to repair storm-damaged fences in Western Australia.

In Australia, new residential housing commencements were weaker compared to the same period last year. The impact of this was partly offset by continuing strong residential renovation and commercial construction activity.

FRC pipes continued to penetrate its targeted market, increasing sales volumes by 26% compared to the same period last year. A new pipe standard was released by Standards Australia during the quarter that will enable our fibre cement pipe to compete more effectively against steel reinforced concrete pipes.

In New Zealand, new residential housing starts continued at high levels although some regions were affected by poor weather. Non-residential construction activity was slightly weaker compared to the same period last year.

Philippines Fibre Cement

Net sales increased 64% from US$4.2 million to US$6.9 million. In local currency, net sales increased 74% due to a 64% increase in sales volume compared to the same quarter of the previous year, from 16.1 million square feet to 26.4 million square feet, and a higher average net selling price.

Domestic market conditions improved in the first half of the quarter compared to the first quarter of this fiscal year, but later softened following signs of political instability.

The average selling price increased 6% compared to the same quarter of the previous year due to a more favourable sales mix.

Other Fibre Cement

Chile Fibre Cement

Our Chilean business continued to penetrate the domestic flat sheet market and build awareness of its product range.

Net sales increased 157% compared to the same quarter last year due to a 97% increase in sales volume and a higher average selling price.

There were further signs of a recovery in Chile’s construction activity during the quarter.

The average selling price increased due to strong export sales and growth in sales of higher-priced, differentiated products.

Hardie® Pipe

Our USA Hardie® Pipe business continued to penetrate the south-east market of the United States and improve its manufacturing efficiency.

Net sales increased 84% compared to the same period last year as market acceptance of our fibre cement pipes continued to grow strongly. Our share of the market for our targeted diameter range of drainage pipes in Florida is estimated to have increased to 20%.

Further manufacturing performance improvements were achieved during the quarter but manufacturing costs remain higher than our target.

The average net selling price decreased 3% compared to the same quarter last year due to competitors’ use of aggressive pricing tactics in response to our market penetration.

Florida road building expenditures were soft as a result of reduced transportation spending by the state. Federal funding is also down due to recent shifts in focus of federal spending from public infrastructure to defence and national security projects. The actual level of spending depends in part on the amount of highway user revenues raised by the government and the continued renewal of the TEA-21, which is expected to be renewed for another six years. Despite lower levels of transportation spending, residential construction continues to be strong in Florida due mainly to low interest rates.

Europe

Our European fibre cement business commenced operations in the first quarter of this fiscal year with the launch in the U.K. and French markets of our Hardibacker® range of interior products and our proprietary pre-painted siding products.

During the quarter the business continued to build awareness and sales among distributors, builders and contractors and penetrate its target markets. Market response to our products has been favourable and the rate of penetration at this early stage is in line with our expectations.

Artisan Roofing

In June 2003, we commissioned our pilot roofing plant at Fontana, California. The pilot plant, which has a design capacity of 25 mmsf, was built to test our proprietary manufacturing technology and to provide product for market testing in Southern California.

Plant testing and manufacturing trials continued during the quarter and the first on-site installations of the new roofing product were completed. It is now expected that commercial sales will commence in the third quarter once inventory levels are sufficient to meet initial demand.

Gross Profit

Gross profit increased 26% from US$73.6 million to US$92.4 million due to improvements in all our major businesses. The gross profit margin increased 0.3 of a percentage point to 36.7%.

USA Fibre Cement gross profit increased 30% due to higher sales volumes and a higher average net selling price, partly offset by an increase in unit cost of sales. The higher unit cost of sales resulted primarily from higher pulp costs, increased sales of higher-priced, differentiated products and the ramp-up of the new manufacturing lines at the Blandon, Pennsylvania and Waxahachie, Texas plants. Cost of sales was lower as a percentage of sales. The gross profit margin increased 2.0 percentage points.

Asia Pacific Fibre Cement gross profit increased 9% following improvements from Australia and New Zealand Fibre Cement and Philippines Fibre Cement. The improved result for Australia and New Zealand was due to a favourable foreign exchange difference. In Australian dollars, Australia and New Zealand fibre cement gross profit decreased 14% due primarily to a decrease in revenue, increased manufacturing costs mainly at our Rosehill, NSW plant and increased freight costs, partly offset by a decrease in SG&A costs. The manufacturing performance of the Rosehill plant returned to more acceptable levels by the end of the quarter. In the Philippines, increased sales and reduced manufacturing costs resulted in the stronger gross profit performance. The Asia Pacific Fibre cement gross profit margin decreased 3.9 percentage points mainly due to an increase in manufacturing costs and freight as a percentage of sales.

Selling, General and Administrative (SG&A) Expenses

SG&A expenses increased 16% compared to the same quarter last year, from US$33.5 million to US$38.9 million. The increase in SG&A expenses was due mainly to sales and marketing expenses associated with growth initiatives in the USA. However, as a percentage of sales, SG&A expenses were 1.1 percentage points lower, at 15.5%.

Research and Development Expenses

Research and development includes costs associated with “core” research projects that are aimed at benefiting all fibre cement business units. These costs are recorded in the Research and Development segment rather than being attributed to individual business units. These costs increased 57% for the quarter to US$3.6 million.

Other research and development costs associated with commercialisation projects in business units are included in the business unit segment results. In total, these costs decreased 9% to US$2.0 million.

Total research and development costs for the quarter were flat as a percentage of sales, at 2.2%.

EBIT²

EBIT increased 35% from US$35.6 million to US$47.9 million. The EBIT margin increased 1.4 percentage points to 19.0%.

USA Fibre Cement EBIT increased 32% from US$40.7 million to US$53.7 million. The increase was due to strong growth in net sales, partly offset by an increase in unit cost of sales and SG&A expenses. The EBIT margin increased 1.8 percentage points to 28.1%.

Asia Pacific Fibre Cement EBIT increased 16% from US$8.1 million to US$9.4 million. The EBIT margin decreased 0.8 of a percentage point to 17.2%.

Australia and New Zealand Fibre Cement EBIT increased 2% from US$8.4 million to US$8.6 million. In Australian dollars, EBIT decreased 14%. The decrease in EBIT in Australian dollars was primarily due to lower net sales compared to the same period last year, an increase in manufacturing costs, partly offset by lower SG&A costs. The EBIT margin was 2.6 percentage points lower, at 18.0%.

Our Philippines business recorded another small operating profit for the quarter due to increased sales.

The Chile Fibre Cement business recorded a small operating profit for the quarter. This follows the business achieving breakeven in the previous quarter of this fiscal year.

Despite continued strong volume growth, our USA Hardie® Pipe business incurred an operating loss for the quarter due to lower prices and higher than targeted unit costs.

Our European fibre cement business became operational during the previous quarter of this fiscal year and incurred a small operating loss, as expected.

General corporate costs decreased by US$1.1 million from US$7.9 million to US$6.8 million. This decrease was primarily due to a US$1.5 million decrease in employee bonus plan expense and a net decrease in other costs, partially offset by an increase of US$0.8 million in employee share based compensation expense from stock appreciation rights primarily caused by an increase in the company’s share price.

Other Expense, net

Other expense, net, increased by US$3.1 million primarily due to a capital duty fee paid in conjunction with our Dutch legal structure. We incurred this fee to extend the scope of our international finance subsidiary to lend to global operations and expect to recover this fee within six months through reduced taxation charges.

Net Interest Expense

Net interest expense decreased by US$0.1 million from US$2.5 million to US$2.4 million. Interest expense decreased by US$1.0 million due to lower average borrowings and an increase in the amount of interest expense capitalised during the quarter compared to the same period in the prior year. This decrease in net interest expense was partially offset by a US$0.9 decrease in interest income due to lower average cash balances compared to the same quarter in the prior year.

Income Tax Expense

Income tax expense decreased by US$0.5 million from US$9.9 million to US$9.4 million.

Operating Profit from Continuing Operations⁴

Income from continuing operations increased by 43% or US$9.8 million, from US$23.0 million for the second quarter of the previous year to US$32.8 million this quarter.

End.

Media/Analysts call:

Greg Baxter – Executive Vice President
Telephone: 61 2 8274 5377
Mobile: 0419 461 368
Email: [email protected]

Or

Steve Ashe
Vice President Investor Relations
Telephone: 61 2 8274 5246
Mobile: 0408 164 011
Email: [email protected]

Facsimile: 61 2 8274 5218

The MD&As and accompanying release and management presentation, along with an audio webcast of the presentation are available at www.jameshardie.com

Notes

1. This Management’s Discussion and Analysis document forms part of a package of information about the company’s results. It should be read in conjunction with the other parts of this package, including a Media Release, a Management Presentation, a Financial Report and a Results at a Glance document.

2. EBIT is defined as operating income. EBIT margin is defined as EBIT as a percentage of our net sales. We believe EBIT and EBIT margin to be relevant and useful information as these are the primary measures used by our management to measure the operating profit or loss of our business. EBIT is one of several metrics used by our management to measure the cash generated from our operations, excluding the operating cash requirement of our interest and income taxes. Additionally, EBIT is believed to be a primary measure and terminology used by our Australian investors. EBIT and EBIT margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with accounting principles generally accepted in the United States of America. EBIT and EBIT margin, as we have defined them, may not be comparable to similarly titled measures reported by other companies.

The use of EBIT and EBIT margins in this document are equivalent to the US GAAP measures of operating income and operating income margin.

3. Operating profit from continuing operations before income taxes is equivalent to the US GAAP measure of income from continuing operations before income taxes.

4. Operating profit from continuing operations is equivalent to the US GAAP measure of income from continuing operations.

5. Net operating profit including discontinued operations is equivalent to the US GAAP measure of net income.

Disclaimer

This report contains forward-looking statements. Words such as “believe,’’ “anticipate,’’ “plan,’’ “expect,’’ “intend,’’ “target,’’ “estimate,’’ “project,’’ “predict,’’ “forecast,’’ “guideline,’’ “should,’’ “aim’’ and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors, which are further discussed in our reports submitted to the Securities and Exchange Commission on Forms 20-F and 6-K and in our other filings, include but are not limited to: competition and product pricing in the markets in which we operate; general economic and market conditions; compliance with, and possible changes in, environmental and health and safety laws; dependence on cyclical construction markets; the supply and cost of raw materials; our reliance on a small number of product distributors; the consequences of product failures or defects; exposure to environmental, asbestos or other legal proceedings; and risks of conducting business internationally. We caution you that the foregoing list of factors is not exclusive and that other risks and uncertainties may cause actual results to differ materially from those contained in forward-looking statements. Forward-looking statements speak only as of the date they are made.

James Hardie Industries N.V.
Results for the 6 months Ended 30 September 2003

Unless otherwise stated, results are for continuing operations only and comparisons are of the
first six months of the current fiscal year versus the first six months of the prior fiscal years.

Total Net Sales

Total net sales increased 24% compared to the same period of the previous year, from US$396.7 million to US$493.1 million.

Net sales from USA Fibre Cement increased 23% from US$307.2 million to US$378.2 million due to continued strong growth in sales volumes and higher selling prices.

Net sales from Asia Pacific Fibre Cement increased 23% from US$85.6 million to US$104.9 million due to increased sales volumes and favourable exchange differences.

Net sales from Other Fibre Cement increased 156% from US$3.9 million to US$10.0 million as the Chilean flat sheet business and the USA-based Hardie® Pipe business continued to grow.

USA Fibre Cement

Net sales increased 23% from US$307.2 million to US$378.2 million.

Sales volume increased 15% from 677.5 million square feet to 778.0 million square feet, due to strong growth in primary demand for fibre cement and a favourable housing construction market.

Residential housing activity remained healthy during the period buoyed by low mortgage rates, strong house prices, low inventory levels of new homes for sale and improved consumer confidence.

Strong growth continued in both the interior and exterior product markets and in the northern and southern regions of the country as our products continued to take share from alternative materials.

The average net selling price increased 7% compared to the same period of the previous year from US$453 per thousand square feet to US$486 per thousand square feet. This was due to an increased proportion of sales of higher-priced, differentiated products and a price increase in some regions implemented in the first quarter of this fiscal year.

In the exterior products market, there was continued strong growth in sales of higher-priced, differentiated products such as vented soffits, Heritage® panels, the ColorPlus™ Collection of pre-painted siding and Harditrim® XLD™. Our share of the interior cement board market continued to increase.

During the period, we completed the upgrade and began ramping-up our Blandon, Pennsylvania plant acquired from Cemplank in December 2001. The upgrade increased design capacity of the plant from 120 mmsf to 200 mmsf. We also completed the upgrade and began ramping up our 160 mmsf panel production line at our Waxahachie, Texas plant.

Also during the period, we commissioned our new proprietary pre-finishing line at our Peru, Illinois plant. This is expected to significantly reduce painting costs for our ColorPlus™ Collection of exterior siding, and help accelerate our market penetration in the northern region.

Asia Pacific Fibre Cement

Net sales for this segment increased 23% from US$85.6 million to US$104.9 million. Sales volume increased 11% from 182.9 million square feet to 202.7 million square feet.

Australia and New Zealand Fibre Cement

Net sales increased 20% from US$76.7 million to US$91.7 million. In Australian dollars, net sales increased 1%.

The increase in local currency net sales was due to a 2% increase in sales volume from 149.7 million square feet to 152.5 million square feet, and a 1% decrease in the average net selling price due mainly to a change in product mix.

In Australia, new residential housing activity slowed during the period, but was better than industry forecasts. The impact of this was partly offset by continuing strong residential renovation and commercial construction activity.

FRC pipes continued to penetrate its targeted market, increasing sales volumes by 26% compared to the same period last year. A new pipe standard was released by Standards Australia during the period that will enable our fibre cement pipe to compete more effectively against steel reinforced concrete pipes.

During the period, we launched ExoTec™ Facade Panel, our new premium facade panel incorporating the next generation of fibre cement composites. The new product is designed for commercial applications.

In New Zealand, new residential housing starts remained at healthy levels but poor weather in some regions affected activity levels in the second quarter. Non-residential construction activity was weaker compared to the same period last year.

Philippines Fibre Cement

Net sales increased 47% from US$8.9 million to US$13.1 million. In local currency, net sales increased 55%. This was due to a 50% increase in sales volume compared to the same period of the previous year, from 33.4 million square feet to 50.2 million square feet and a higher average net selling price.

Domestic market conditions were relatively weak in the first half of the period but improved in the second half. Demand softened at the end of the period due to signs of political instability.

The average selling price increased 3% compared to the same period of the previous year due to a more favourable sales mix.

Other Fibre Cement

Chile Fibre Cement

Our Chilean operation continued to increase its penetration of the local market in line with the targets. The business has captured approximately a 25% share of the Chilean flat sheet market.

Net sales increased 186% compared to the same period last year due to a 113% increase in sales volume and a higher average selling price.

Construction activity in Chile began to show signs of recovery during the period after being stagnant since the end of 2001.

The average selling price increased due to strong export sales and growth in sales of higher-priced, differentiated products.

Hardie® Pipe

Our USA Hardie® Pipe business continued to penetrate the south-east market of the United States and improve its manufacturing efficiency.

Net sales increased 124% compared to the same period last year due to a 135% increase in sales volume and a lower average selling price.

Market acceptance of our fibre cement pipes continued to grow strongly. Our share of the market for our targeted diameter range of drainage pipes in Florida is estimated to have increased to 20%.

The manufacturing performance of the plant was further improved during the period, reducing costs and increasing output, particularly of the larger diameter pipes. Despite this, manufacturing costs remain higher than our targets.

The average net selling price decreased 5% compared to the same period last year due to competitors’ use of aggressive pricing tactics in response to our market penetration.

Florida road building expenditures were soft as a result of reduced transportation spending by the state. Federal funding is also down due to recent shifts in focus of federal spending from public infrastructure to defence and national security projects. The actual level of spending depends in part on the amount of highway user revenues raised by the government and the continued renewal of the TEA-21, which involves significant government spending on highway construction. It is expected that the TEA-21 will be renewed for another six years. Despite lower levels of transportation spending, residential construction continues to be strong in Florida due mainly to low interest rates.

Europe

Our European fibre cement business commenced operations during the period with the launch in the U.K. and French markets of our Hardibacker® range of interior products and our proprietary pre-painted siding products.

Awareness of our product range among distributors, builders and contractors is growing and we started making sales of Hardibacker® and the pre-painted siding products during the period.

In June 2003, we commissioned a new coating line near Southampton in England. The line is used to apply the finishing coat to siding products imported from our United States business.

Artisan Roofing

In June 2003, we commissioned our pilot roofing plant at Fontana, California. The pilot plant, which has a design capacity of 25 mmsf, was built to test our proprietary manufacturing technology and to provide product for market testing in Southern California.

Plant testing and manufacturing trials were conducted during the period and the first on-site installations of the new roofing product were completed. Commercial sales are expected to begin in the third quarter once inventory levels are sufficient to meet initial demand.

Gross Profit

Gross profit increased 28% from US$142.1 million to US$181.7 million due to improvements in all our major businesses. The gross profit margin increased 1.0 percentage point to 36.8%.

USA Fibre Cement gross profit increased 32% due to higher sales volumes and a higher average net selling price, partly offset by an increase in unit cost of sales. The higher unit cost of sales resulted primarily from higher pulp costs, increased sales of higher priced differentiated products and the ramp-up of the new manufacturing lines at the Blandon, Pennsylvania and Waxahachie, Texas plants. Cost of sales was lower as a percentage of sales. The gross profit margin increased 2.8 percentage points.

Asia Pacific Fibre Cement gross profit increased 10% following improvements from Australia and New Zealand Fibre Cement and Philippines Fibre Cement, which increased 7% and 71%, respectively. The improved result for Australia and New Zealand was due to a favourable foreign exchange difference. In Australian dollars, Australia and New Zealand fibre cement gross profit decreased 9% due primarily to a decrease in manufacturing performance at our Rosehill, NSW plant and increased freight costs. The manufacturing performance of the Rosehill plant returned to more acceptable levels by the end of the period. In the Philippines, increased sales and reduced manufacturing costs resulted in the stronger gross profit performance. The Asia Pacific Fibre Cement gross profit margin decreased 3.6 percentage points.

Selling, General and Administrative (SG&A) Expenses

SG&A expenses increased 18% compared to the same period last year, from US$63.6 million to US$75.1 million. The increase in SG&A expenses was due mainly to sales and marketing expenses associated with growth initiatives in the USA. However, as a percentage of sales, SG&A expenses were 0.8 of a percentage point lower, at 15.2%.

Research and Development Expenses

Research and development includes costs associated with “core” research projects that are aimed at benefiting all fibre cement business units. These costs are recorded in the Research and Development segment rather than being attributed to individual business units. These costs increased 54% for the period to US$6.3 million.

Other research and development costs associated with commercialisation projects in business units are included in the business unit segment results. In total, these costs increased 11% to US$4.1 million.

Total research and development costs for the period increased 0.1 of a percentage point to 2.1% of net sales.

EBIT(2)

EBIT increased 36% from US$70.7 million to US$96.2 million. The EBIT margin increased 1.7 percentage points to 19.5%.

USA Fibre Cement EBIT increased 36% from US$79.5 million to US$107.8 million. The increase was due to strong growth in net sales, partly offset by an increase in unit cost of sales and SG&A expenses. The EBIT margin increased 2.6 percentage points to 28.5%.

Asia Pacific Fibre Cement EBIT increased 15% from US$15.6 million to US$18.0 million. The EBIT margin decreased 1.0 percentage point to 17.2%.

Australia and New Zealand Fibre Cement EBIT increased 8% from US$15.8 million to US$17.0 million. In Australian dollars, EBIT decreased 9%. The decrease in EBIT in Australian dollars was due mainly to a decrease in manufacturing performance at the Rosehill, NSW plant and increased freight costs. The EBIT margin was 2.1 percentage points lower, at 18.5%.

Our Philippines business recorded a small operating profit for the period due to increased sales.

The Chile Fibre Cement business recorded an inaugural small operating profit for the period.

Despite continued strong volume growth, our USA Hardie® Pipe business incurred an operating loss for the period due to lower prices and higher than targeted unit costs.

Our European fibre cement business became operational during the period and incurred a small operating loss, as expected.

General corporate costs increased by US$0.3 million from US$13.9 million to US$14.2 million. This increase was due to a US$2.0 million increase in employee share based compensation expense from stock appreciation rights primarily caused by an increase in the company’s share price, partially offset by a US$1.5 million decrease in our employee bonus plan expense and a net decrease in other costs.

Other Expense, net

Other expense, net, increased by US$3.2 million primarily due to a capital duty fee paid in conjunction with our Dutch legal structure. We incurred this to extend the scope of our

international finance subsidiary to lend to global operations and expect to recover this fee within six months through reduced taxation charges.

Net Interest Expense

Net interest expense decreased by US$0.7 million from US$5.4 million to US$4.7 million. Interest expense decreased by US$2.5 million due to lower average borrowings and an increase in the amount of interest expense capitalised during the half year compared to the same period in the prior year. This decrease in net interest expense was partially offset by a US$1.8 million decrease in interest income due to lower average cash balances compared to the same period in the prior year.

Income Tax Expense

Income tax expense increased by US$2.5 million from US$20.0 million to US$22.5 million.

Operating Profit from Continuing Operations(4)

Income from continuing operations increased by 45% or US$20.3 million, from US$45.4 million for the first half of the previous year to US$65.7 million this half year.

Discontinued Operations

We recorded income from discontinued operations of US$1.8 million and US$55.1 million during the first half of the current and previous fiscal years, respectively. The first half of the fiscal year primarily includes profit recorded from the sale of our New Zealand Building Systems business on 30 May 2003. The first half of the previous fiscal year primarily consisted of net profit related to the sale of our Gypsum business.

Liquidity and Capital Resources

We have historically met our working capital needs and capital expenditure requirements through a combination of cash flow from operations, proceeds from the divestiture of businesses, credit facilities and other borrowings, proceeds from the sale of property, plant and equipment and proceeds from the redemption of investments. Seasonal fluctuations in working capital generally have not had a significant impact on our short-term or long-term liquidity. We believe that we can meet our present working capital requirements for at least the next 12 months based on our current capital resources.

We had cash and cash equivalents of US$98.8 million as of 30 September 2003. At that date we also had credit facilities totalling US$428.6 million of which US$174.4 million was outstanding. Our credit facilities are all uncollateralised and consist of the following:

Cash Flow

Net operating cash inflows increased by US$18.4 million to US$91.0 million for the six months ended 30 September 2003 compared to the same period in the prior year. Net income after adjusting for the gain on disposal of subsidiaries and businesses increased by US$18.6 million. Additionally, we had a decrease in operating cash flows of US$0.2 million from the net change in working capital account balances and non-cash income and expenses.

Net investing activities produced a cash outflow of US$38.5 million for the six months ended 30 September 2003 compared to a cash inflow of US$310.6 million for the same period in the prior year. Proceeds from the disposal of subsidiaries and businesses decreased by US$329.4 million, and capital expenditures increased by US$20.1 million. Proceeds of US$5.0 million from the sale of subsidiaries and businesses in the current period resulted from the sale of our New Zealand Building Systems business in May 2003. The US$44.1 million capital expenditures in the current period resulted primarily from continued operating plant expansions and construction and new property purchases. We had other cash inflows from investing activities of US$0.6 million during the six months period ended 30 September 2003.

Net financing activities resulted in an outflow of US$8.8 million for the six months ended 30 September 2003 compared to a US$93.4 million outflow in the same period of the prior year. In the prior year period, we repaid US$100 million of bank debt, which did not recur in the current

period. Proceeds from borrowings decreased by US$3.8 million to US$0.6 million. We had a US$0.2 million decrease in proceeds from the issuance of shares to US$2.0 million and we paid dividends in the amount of US$11.4 million. The proceeds of US$2.0 million represent stock option exercises during the six months ended 30 September 2003.

Interim Dividend

The Board has declared an interim dividend of US 2.5 cents a share payable to share/CUFS holders on 16 December 2003. The Record Date is 27 November 2003 to determine entitlements to this dividend (i.e., on the basis of proper instruments of transfer received by the Company’s registrar, Computershare Investor Services Pty Ltd, Level 3, 60 Carrington Street, Sydney NSW 2000, Australia, by 5:00pm if securities are not CHESS approved, or security holding balances established by 5:00pm or such later time permitted by SCH Business Rules if securities are CHESS approved).

This interim dividend and future dividends will be unfranked for Australian taxation purposes.

This dividend is subject to Dutch withholding tax of 25%. Many Australian resident holders may reduce the withholding tax rate to 15% deduction if they are eligible and have completed and lodged a current special Form A before the dividend record date with the Company’s registrar. Holders with 25% withholding tax may be eligible to reclaim a portion of the tax after payment date. For withholding tax information see: www.jameshardie.com (select Investor Relations, then Shareholder services, then Tax Information) or contact Computershare.

The Australian currency equivalent amount of the dividend to be paid to CUFS holders will be announced to the ASX on 28 November 2003.

No dividend reinvestment plans are available for this dividend.

End.

Media/Analysts call:

Greg Baxter — Executive Vice President
Telephone: 61 2 8274 5377
Mobile: 0419 461 368
Email: [email protected]

Or

Steve Ashe
Vice President Investor Relations
Telephone: 61 2 8274 5246
Mobile: 0408 164 011
Email: [email protected]

Facsimile: 61 2 8274 5218

The MD&As and accompanying release and management presentation, along with an audio webcast of the presentation are available at www.jameshardie.com

Notes
1. This Management’s Discussion and Analysis document forms part of a package of information about the company’s results. It should be read in conjunction with the other parts of this package, including a Media Release, a Management Presentation, a Financial Report and a Results at a Glance document.

2. EBIT is defined as operating income. EBIT margin is defined as EBIT as a percentage of our net sales. We believe EBIT and EBIT margin to be relevant and useful information as these are the primary measures used by our management to measure the operating profit or loss of our business. EBIT is one of several metrics used by our management to measure the cash generated from our operations, excluding the operating cash requirement of our interest and income taxes. Additionally, EBIT is believed to be a primary measure and terminology used by our Australian investors. EBIT and EBIT margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with accounting principles generally accepted in the United States of America. EBIT and EBIT margin, as we have defined them, may not be comparable to similarly titled measures reported by other companies.

The use of EBIT and EBIT margins in this document are equivalent to the US GAAP measures of operating income and operating income margin.

3. Operating profit from continuing operations before income taxes is equivalent to the US GAAP measure of income from continuing operations before income taxes.

4. Operating profit from continuing operations is equivalent to the US GAAP measure of income from continuing operations.

5. Net operating profit including discontinued operations is equivalent to the US GAAP measure of net income.

Disclaimer
This report contains forward-looking statements. Words such as “believe,’’ “anticipate,’’ “plan,’’ “expect,’’ “intend,’’ “target,’’ “estimate,’’ “project,’’ “predict,’’ “forecast,’’ “guideline,’’ “should,’’ “aim’’ and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors, which are further discussed in our reports submitted to the Securities and Exchange Commission on Forms 20-F and 6-K and in our other filings, include but are not limited to: competition and product pricing in the markets in which we operate; general economic and market conditions; compliance with, and possible changes in, environmental and health and safety laws; dependence on cyclical construction markets; the supply and cost of raw materials; our reliance on a small number of product distributors; the consequences of product failures or defects; exposure to environmental, asbestos or other legal proceedings; and risks of conducting business internationally. We caution you that the foregoing list of factors is not exclusive and that other risks and uncertainties may cause actual results to differ materially from those contained in forward-looking statements. Forward-looking statements speak only as of the date they are made.

James Hardie Industries N.V.

and

Subsidiaries

Financial Report

30 September 2003

INDEX

Report of Independent Auditors

To the Board of Directors and Shareholders of James Hardie Industries N.V. and Subsidiaries

We have reviewed the accompanying consolidated balance sheet of James Hardie Industries N.V. and Subsidiaries as of 30 September 2003, and the related consolidated statements of income for each of the three-month and six-month periods ended 30 September 2003 and 2002, the consolidated statements of cash flows for the six-month periods ended 30 September 2003 and 2002, and the consolidated statement of changes in shareholders’ equity for the six-month period ended 30 September 2003, as stated in U.S. dollars. We have not reviewed any amounts stated in Australian dollars included in the accompanying financial statements. These interim financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet as of 31 March 2003, and the related consolidated statements of income, cash flows and changes in shareholders’ equity for the year then ended (not presented herein), and in our report dated 2 May 2003 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of 31 March 2003, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

As discussed in Note 17 to the consolidated financial statements for the year ended 31 March 2003, on 25 April 2002, the Company sold the assets of its Gypsum business.

As discussed in Note 2 to the consolidated financial statements for the year ended 31 March 2003, the Company changed its method of accounting to reflect stock-based compensation under a fair value based model and retroactively restated all years presented. Also as discussed in Note 2, the Company changed its method of accounting for early extinguishments of debt, which resulted in costs incurred during the year ended 31 March 2003 not being classified as extraordinary.

PRICEWATERHOUSECOOPERS LLP
Los Angeles, California
10 November 2003

Item 1. Financial Statements

JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these interim consolidated financial statements.

1

JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)