Fletcher Building loses $273 million

Under-fire Fletcher Building has posted a first-half $273 million loss - down from a $187 million profit a year ago - as more details emerge of weakness in its construction division.

Accumulated and estimated losses from its Building + Interior (B+I) division over the past two financial years stand at $952 million.

Fletcher is renegotiating its multibillion-dollar debt financing arrangements, after breaching banking covenants.

Revenue for the six months to December was up 6% on a year ago to $4.88 billion, with earnings before interest declining from $310 million last year to a $322 million loss, while underlying profit plunged 246% from $187 million a year ago to the $273 million loss.

Fletcher shares, already down more than 32% on a year ago, lost a further 11c, to trade around $6.75 following the announcement - a five-year low.

Yesterday, Fletcher chief executive Ross Taylor reiterated earlier disclosures B+I would seek no new commercial construction work and was focused on completing its projects in hand, including the Auckland convention centre which accounts for the lion's share of financial woes.

Forsyth Barr broker Damian Foster said the result was in line with expectations, delivering a ''soft result'' from New Zealand operations.

Fletcher's housing business was affected by a $12 million provision for a forecast loss on a Christchurch apartment project, although the Residential and Land Development division's reported operating earnings rose 57% to $47 million.

Last year's Construction division $24 million profit plunged to a loss of $619 million, including the B+I loss of $631 million, while Construction South Pacific business saw reported earnings decline from $23 million to $10 million, with several projects coming to completion.

Fletcher reiterated full year earnings guidance in a range of $680 million-$720 million, excluding the B+I provisions.

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