Fletcher Building said its net profit came to $144 million in
the first half to December 31, down 13 per cent compared with
the previous corresponding period, and cut its earnings
guidance for the 2011/12 year.
New Zealand's biggest listed company now expects its full
year net profit, before unusual items, to be in a range of
$310m to $340m. The company had previously said it would
report a 2011/12 profit similar to last year's profit of
$359m.
For the six months, operating earnings (earnings before
interest and tax) were $256 million, 10 per cent lower than
the $285 million achieved in the first half of the 2011
financial year.
The result included unusual expenses totalling $15 million
after tax incurred to date in restructuring of its Laminex
business.
The first half profit was slightly below the company's own
guidance. Fletcher Building last year said it expected it
interim profit to be around $150m, down from $166m in the
previous corresponding period.
Fletcher Building declared an interim dividend of 17c a
share, up from 16c a year earlier.
The dividend will be fully franked for Australian tax
purposes but will not be imputed for New Zealand tax
purposes, it said.
Total revenue for the group increased 30 per cent, as a
result of the acquisition of Australia's Crane. Underlying
revenues on a like-for-like basis, excluding Crane, fell by 5
per cent.
Chief Executive Jonathan Ling said trading conditions were
tough, particularly in the Australian and New Zealand
residential housing.
"Consequently, all of our businesses exposed to the
residential markets in both countries have experienced lower
volumes and reduced earnings,'' he said.
Fletcher Building is also undertaking a strategic review of
its Australian and New Zealand insulation businesses, he
said.
The outcome of the review may result in additional costs
being incurred to improve the performance of these
businesses, he said.
Fletcher Building said its guidance for the full year assumed
"very modest'' increases in new housing construction in New
Zealand, no improvement in Australian residential building
activity and reflects the magnitude 6.3 earthquake which
occurred in Canterbury on 23 December 2011, which has further
set back reconstruction activity.
Jamie Gray, APNZ business reporter
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