Fletcher Building Expects More Losses From Major Projects

By Ben Collins Features Dow Jones Newswires

Construction and building materials firm Fletcher Building Ltd. said Wednesday that it expects a further 160 million New Zealand dollar (US$110 million) loss this fiscal year from its buildings and interiors division.

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Cost blow-outs at two major projects caused the company to issue a series of earnings downgrades last year, and it recently brought in auditor KPMG for a review.

The company is one of the biggest on New Zealand's benchmark NZ50 index, and has decided to split the loss from the buildings and interiors division out from its full-year guidance for earnings before interest, tax and significant items of between NZ$680 million and NZ$720 million.

"I want to offer my personal apology to our shareholders. Mistakes have been made and responsibility ultimately rests with the Board. As we stated at our full year results briefings, we fully accept this responsibility," chairman Ralph Norris said in a regulatory filing.

Fletcher Building named the two major projects for the first time. They are the justice precinct in Christchurch and New Zealand International Convention Centre in Auckland. The company said the clients allowed it to name them despite confidentiality agreements "in the face of these extenuating circumstances and shareholder demand."

The company said the earnings guidance for the remainder of the company is informed by trading results across all of its divisions for the first quarter of the fiscal year, and the current outlook for the remainder of the financial year.

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Meanwhile, it also said former UGL boss Ross Taylor would become its new chief executive next month, after the departure of Mark Adamson earlier this year.

Write to Ben Collins at ben.collins@wsj.com

(END) Dow Jones Newswires

October 24, 2017 16:42 ET (20:42 GMT)