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Fletcher Building posted a 20 percent decline in full-year profit after taking $150 million of one-time charges for plant closures and impairments. Pretax earnings rose in line with guidance, driven by a strong New Zealand performance.
Profit fell to $270 million in the year ended June 30, from $339 million a year earlier, the Auckland-based company said in a statement. Sales climbed 3 percent to $8.66 billion.
The building products and construction company took $150 million of one-time charges in the latest year, including a $78 million impairment of goodwill relating to its Forman, Stramit, Tasman Insulation and Humes businesses. Site closure costs of $65 million also related to the Crane Copper Tube business and Iplex Australia. Operating earnings excluding one-time items rose 5 percent to $653 million, in line with company guidance and just above the $651.9 million forecast by brokerage Forsyth Barr.
“The New Zealand construction market was strong across the residential, commercial and infrastructure sectors, and we experienced strong volume growth in most of our businesses,” said chief executive officer Mark Adamson. “Conditions in Australia were much more mixed, with a buoyant residential construction market but weak conditions in the mining, resources and infrastructure sectors.”
Strong earnings growth in businesses exposed to new housing construction in Australia, such as Laminex, Fletcher Insulation and Tradelink, was offset by “the sudden fall in demand for plastic pipes from the coal seam gas sector,” he said. “Operating earnings beyond New Zealand and Australia were lower, with continued weak conditions in Europe and a more difficult trading environment experienced in China but a strong performance from Formica in North America.
Fletcher shares last traded at $7.58 and have declined 16 percent in the past 12 months.
