Fletcher Building Announce Loss of $322 million
In the latter half of 2017, Fletcher Building lost $322 million of its operating earnings. The corporation flagged its growing losses and the board has suspended the payment of an interim dividend.
The losses from the Building & Interior division of Fletcher Building is expected to be $660 million. The Chairman Sir Ralph Norris will resign once his successor is found.
Sixteen large scale construction projects including the New Zealand International Convention Centre are the major reasons of the losses. CFO of Fletcher Building Bevan McKenzie said that some of the losses from B+I could be covered by a tax benefit of $117 million. The forecast losses in the upcoming three years shall also be tax deductible.
Despite the losses, the company is expecting its full year operating earnings to be between $680 million and $720 million.Chief Executive Taylor said Fletcher Building would review its business and might change its portfolio if necessary to overcome the current downturn. Taylor believed the rest of the business excluding B+I would all perform solidly.
Fletcher Building’s comment on the market
Chief Executive Taylor said that the performance of the residential, commercial and infrastructure market of Fletcher Building is in line with expectations. He pointed that the growth for the Build NZ sector would not be large as the company is operating near capacity. As for Australia, Fletcher Building is expected to have steady growth in the infrastructure and commercial sector.
Regarding the current downturn, Taylor said the company might challenge the current B+I contracts via legal procedures to reduce its losses.